CRED Finally Finds Product/Market Fit - Indian Startup News 229
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0:00 CRED Finds PMF
2:24 Ashneer Grover Settles with BharatPe
4:05 Ola Electric Losing Market Share
6:28 Swiggy Instamart 24x7 Free Delivery
6:53 Zerodha Maintains Zero Brokerage
7:17 Funding News
CRED just released its FY24 financials, showing impressive growth. The company, founded by Kunal Shah, generated nearly 2,500 crore rupees in revenue in FY24, marking a 66% increase from the 1,400 crore rupees it earned in FY23. Even more noteworthy, its operating losses decreased by 41% to ₹601 crore. Kunal Shah has faced skepticism in the past about his ability to monetize CRED’s user base, but now he seems to be turning a corner. Back in FY20, headlines highlighted how Kunal Shah's CRED was spending ₹727 to earn a single rupee, but today, the narrative has changed significantly. The company has three main revenue streams: fees from credit card bill payments, insurance, and loans, which together account for over 90% of its revenue. CRED started offering loans in 2020 and now distributes loans worth ₹15,000 crore, though this is still behind Paytm, which distributes ₹50,000 crore in loans.
CRED's monetization strategy has also seen success with its 11.5 million monthly active users, of whom only a third have been monetized. Yet, the company is still outperforming giants like PhonePe. CRED’s ARPU (Average Revenue Per User) is ₹1,900, nearly 10 times higher than PhonePe’s ₹195. One key factor might be CRED’s community of high-trust individuals—only people with a credit score of 750 or above can join the platform. This selective approach seems to have paid off, especially as CRED continues to expand its offerings, including the CRED Garage platform, which helps car owners manage their vehicles and has onboarded over 6 million vehicles within a year. Despite its history of high marketing costs, CRED has cut down on marketing expenses while growing its user base.
In other news, Ashneer Grover and BharatPe have finally reached a settlement, marking the end of a long-standing clash. Ashneer Grover, who was forced out of the company in 2022 due to allegations of fraud and forgery, will no longer be associated with BharatPe. Previously holding an 8.43% stake, Ashneer Grover is set to transfer 2.5 to 3% of his shares back to BharatPe, and another 2.8% to former co-founder Bhavik Koladiya. The rest of Ashneer Grover’s shares will be managed by his family trust. The settlement came after years of legal battles, with some reports suggesting it was prompted by Ashneer’s wife, Madhuri Jain, facing potential arrest. Ashneer’s brother-in-law, Deepak Gupta, was recently arrested for misappropriating 81 crore rupees from BharatPe.
Bhavish Aggarwal’s Ola Electric’s market share in the electric two-wheeler space has dropped significantly, falling from 52% in April 2024 to 27% by September. In September, Ola Electric sold just 23,935 units, the lowest figure of the year. Ola Electric remains the market leader but Bhavish Aggarwal’s EV startup faces stiff competition from Bajaj and TVS, whose market shares have been steadily growing. Bajaj now holds 21.4% of the market, while TVS controls 20.2%. Both Bajaj and TVS have ramped up their offline distribution networks, allowing them to better compete with Bhavish Aggarwal and Ola, which initially benefited from its direct-to-consumer online sales model. However, Ola Electric’s after-sales service has been a point of frustration for many customers, with reports of long wait times for repairs and expensive part replacements.
Swiggy Instamart has introduced 24x7 free delivery in Delhi-NCR ahead of the festive season. This move by Swiggy Instamart is aimed at capturing late-hour demand for essentials and last-minute preparation products. If the initiative proves successful, Swiggy Instamart might expand its 24x7 delivery service to other cities.
Zerodha has decided to stick to its zero brokerage model for now, despite concerns over a potential 10% revenue drop due to SEBI's True to Label circular. Nithin Kamath, CEO of Zerodha, assured users that equity transactions will remain free for the foreseeable future for Zerodha customers.
In funding news, Indian startups raised just $47 million this week.
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