Cred ticks the right boxes!!
Start-ups that want to succeed are now aiming at keeping their employees satisfied. Companies like Cars24, Swiggy, Zerodha, etc have taken decisions to vest ownership by ESOP (Employees Stock Option Plan). Out of all, Cred has made it big on the news as they have issued Rs. 9 crores worth buy-back for ESOP. What stands out for Cred?
Cred is just a two-year old start-up and has decided to create wealth for the employees at an early stage which shows the importance of human resource. In the case of Cred, which is more inclined towards the digital mode of business the need for human resource is minimal. It is a company with only around 300 employees which indicates a small workforce and, creating wealth for these employees makes them more loyal towards the organisation. Loyalty rises simply because the employees are now owners of the business. Hence, Cred ticked an important box on the checklist that contributes to its early success.
The quick growth of Cred can be understood considering a few factors. Firstly, the services offered by the start-up attracts customers who possess a credit card. The target audience is naturally that part of the society that are at a considerably good level financially. It is a boost for the credit card bill payers as they are rewarded by Cred for timely payments. The rewards help discounts at e-commerce sites. The trend of shopping online grew manifolds due to the pandemic which needless to say helped Cred create a connect with the users.
Additionally, the start-up has been into aggressive advertising which has been seamlessly creative. The ads included famous Bollywood stars like Anil Kapoor, Madhuri Dixit, Alka Yagnik and many others, the set-up of the advertisement was intriguing as they were auditioning for Cred’s promotions. It indirectly also meant that the audience with an older age should transcend into the digital mode of payments. A boost to this advertisement campaign was when Cred became the official partner for IPL (Indian Premier League) for the 2020 edition. It led to a major increase in the user base and today, Cred covers up to 20% of the credit card payments in India.
While customer satisfaction increased, the investors’ faith increased and an investment of $81 million was made. I use the word faith because the existing investors played a major role to raise the money. The investment was led by groups like DST Global, Rabbit Capital, Tiger Global, General Catalyst and a few others. This huge sum is going to be used for expanding the services further towards lending and personal finance.
Cred is now planning to expand in multiple facets by approaching companies like Big Basket, Dineout and Ixigo. Furthermore, it also aims at bringing in D2C (Direct to Consumer) companies and help them grow without a middle ground platform like Amazon. With online transactions being safer with time and government supporting digitalisation Cred has a bright future ahead provided people stick on to the trend of online shopping and payments post-Covid. Cred has certainly created a strong footing in the start-up industry and is second in the rankings according to LinkedIn’s hottest start-ups.
The co-founder of Cred, Mr Kunal Shah said, “As we raise funds to support our next phase of growth, it’s important to acknowledge the role that employees have played in our success. We are committed to enabling wealth-creation opportunities for them and have allocated 10% of our cap table allocated for ESOPs even at the Series C stage. I am grateful for their conviction, as well as that of our investors, and am focused on creating value for them as the product and business evolve.” The year 2020 has been a boon for the start-up but the interesting point would be to see till when will Cred tick the right boxes in their checklist to growth.