CRED moves from wallet to cars with 'Garage'

Fintech unicorn CRED on Thursday introduced ‘CRED Garage’, a personal vehicle management feature within the main mobile app.

The feature essentially aims to provide a single dashboard for priority concierge services, timely reminders, document management, and insights on spending. Users can also add more vehicles in their household to earn more incentives.

There is also a DigiLocker integration, which enables users to access the soft copy of their essential documents such as driver’s license, registration certificate, and insurance papers. The CRED Garage also features the ability to renew motor insurances, recharge FASTags, and track traffic challans.

The concierge service, as mentioned above, allows users to get priority assistance such as queries around maintenance, servicing, and claims. The concierge also helps get roadside assistance in case of a breakdown.

"Whether a first-time owner or a motorhead, anyone who owns cars knows that the delight of driving often gets overtaken by the anxiety of managing and maintaining. CRED garage is our solution to this challenge,” CRED executive Akshay Aedula said in a statement.

CRED has long expanded its offerings beyond paying credit bills. In April last year, the company forayed into mobile, DTH, FASTtag recharge options along with utility bill payments such as electricity, water bills and municipal tax through the app.

The move was then considered to be aimed at taking on mass volume players including Paytm, PhonePe, GooglePe and MobiKwik. Other previous efforts included an ecommerce platform, peer to peer lending and house rental payments vertical. Earlier this year, it launched peer-to-peer UPI payments on its app.

According to our Data intelligence platform TheKredible, PeakXV and TigerGlobal-backed company has raised over a billion across 9 funding rounds. Peak XV Partners (erstwhile Sequoia Capital) is the largest external shareholder followed by Ribbit Capital and Tiger Global. Its founder and CEO Kunal Shah commands a significant 22% stake cumulatively along with its QED innovation labs. Check TheKredible to see Cred’s detailed funding rounds and captable.

As far as personal vehicle management goes, startups like Park+ have already made a significant presence in this space. The platform allows users to find parking spots, check challans, buy and recharge FASTags, and also access insurance services.

Park+, backed by the likes of Peak XV and Matrix Partners, saw its revenue ballooning nearly 5.36x in FY22 to Rs 36.4 crore. Its losses also rose 2.5X to Rs 60 crore in FY22 against Rs 24 crore in FY21. On a unit level, Park+ spent Rs 2.77 to earn a rupee of operating revenue in FY22.

CRED, on the other hand, saw its operating revenue rising 4.4X to Rs 393.6 crore during FY22, in contrast to the Rs 88.6 crore the company made in FY21. Akin to the rise in expenditure, CRED’s losses also hiked over two folds to Rs 1,279.4 crore against Rs 524 crore in FY21. Moreover, its outstanding losses have mounted to Rs 2,225 crore at the end of FY22. On a unit level, the firm spent Rs 4.3 to earn a rupee of operating income in FY22.

While it will be easy to dismiss Garage as a ‘rich people’s solution’ for a problem that is marginal at best, it does tie-in with CRED’s focus on this layer of users in India. Even as the firm has opened its credit score-protected gates to a wider audience, the launch of Garage marks a renewed attention to the cream of the crop. Perhaps, it is the 80/20 rule here, but by its very nature Garage can just be a small feature, not a major product, in our view. Will it attract new users? We really doubt it, considering existing penetration levels for CRED (healthy) in the well off segment. Is Garage a consequence of a shared problem for users within CRED? We wouldn’t discount that either.