What is Cred’s business model?
Is Cred a business or just a long party? If they are a business then how do they make money? What do they stand for - currently it just looks like a hangout place for super privileged bros?
HappyFeet92
Stealth
a year ago
There are quite a few cred folks on here who will get touchy now
Hey now, changing the black button color to “dark slate gray” is important work
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People outside are more concerned about creds business model than people inside.
Also if any cred guys are here answer this-
Wtf is that edgy 90s tron legacy looking UI. I swear the lead designer needs to be sent back to school and learn color theory and that shapes like circles exit.
They don't have any business model. It's glorified credit card payment scheduler.
Idk about their business model, and frankly idc, helped me pay cc bills in one place, but what the fuck is with so many design changes? As soon i get used to it, its already changed!! I started using cheq not for the reward(which actually have some value) but atleast they wont change their interface every other week(hopefully).
How do so many people not know that they are in to the lending business?
You know about Bajaj Finserve, how did they become so big and profitable, it's because they have access to data of the most credit worthy people of India. Now Cred has access to the most premium layer of credit worthy people of India, think people who use amex or DCB, they are the people who take new iphones every year and change cars every 2 years and take holidays on borrowing but definitely pay back on time and Just want to live the life.
Cred caters to them and makes money on processing fees and interest spread. Processing fee of a loan can be 2-3% of the loan amount and interest spread simply means, borrow at 9% from a debt facility and give loans at 18% to a borrower who you are sure that will repay back.
This is the bread and butter for now, but don't rule out the possibility of becoming a bank or wealth management company like Navi. GenZ want things simple and should look sassy and cool and they are also the cream consumer with earning potential, that's the target.
Last note, imagine you get a sexy looking metal credit/debit card with your choice or engraving or design one that you can flaunt or use to snort, I'm sure 50% of the people will join the waitlist in 1 hour of the tweet.
DamnItAI
Stealth
a year ago
A genuine question, why will I pay using a weed-hallucination infected app rather than bank's app?
HengDengLee
Stealth
a year ago
Helps when you have multiple cards and tbh most bank apps have a UI which looks like it's straight out of the 90s
SeedhaLadka
Stealth
a year ago
Cred’s motive is to make fool of it’s customers and investors😂
UpsetUnicorn
Stealth
a year ago
I think their business model is data farming. Considering they have access to the emails and SMSes of so many people, they are pending it or looking to do so. They are probably also earning through their P2P lending.
Thebludger
Student
a year ago
1. They earn from listing fees, Brands pay them for their visibility.
2. They sells users data to Banks, Credit card co.
I think it is to extend personal loans to near-prime customers, who are on the right side of the K-shape recovery. That’s the bit that makes money. Much of that was through lending partners thus far, such as banks, where Cred originated and made a fee, in lieu of providing a loss protection (fldg), but now the aim is to bring those loans on own books through an nbfc license.
The acquisition cost of getting those premium customers, by spending a lot of money on quirky ads, sponsorships, et al, looks immense though.
So story must be about a mega PL book of sticky premium customers is being built, which will generate swathes of profit to more than offset the losses in early years and generate RoE, assuming low credit costs over the years.
My take - unlikely that public markets will see it that way, not for now at least. So the source of return for current investors would have to be exuberance by incoming private investors that buy into this plan.
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