Source: Entrackr
According to people familiar with the matter, fintech unicorn CRED is working with IndusInd Bank to launch its first co-branded credit card. The card is expected to be launched in the next three months.
“The company has been planning for a co-branded credit card for a long time, but the final decision was made a couple of months ago,” said one of the sources, as per Entrackr.
Transitioning Beyond Bill Payments
With the launch of this new product, CRED will be making its biggest move since it got started with credit card bill payments and assessing rewards points. CRED has added numerous features over the years, including credit score tracking, cash back offers, hidden charge detection, shopping and travel discounts, FASTag, and insurance instruments. It hopes to add value and provide a more complete financial product to its users with the launch of its own co-branded card. As of June 2024, the platform had around 13 million monthly active users.
CRED’s last valuation was $3.64 billion, after it raised $72 million in its most recent funding round. The funding round also reflected a valuation drop of nearly 43% from its earlier $6.4 billion Series F round, where the company had raised $140 million in June 2022.
For FY24, the net loss increased by 22% to ₹1,644 crore, including ESOPs and taxes. Meanwhile, revenue increased 66%, year-on-year, to ₹2,473 crore. CRED has stated it is targeting profitability by FY26.
Market Context
CRED’s move into co-branding with credit cards puts it in the same category as other fintechs like Slice, Uni, Scapia, OneCard, Fibe, and Super. money, which has all recently launched a similar product with banks.
Established players, including SBI Cards, ICICI Bank, and HDFC Bank, already represent substantial competition; they are less attractive to premium customers by premium institutions. This deal could be meaningful for IndusInd Bank to develop its relevance to prestige customers, particularly following the ambiguous performance of its performance over the last few years.
What It Means
According to industry experts, CRED is well-positioned for success because it knows how premium users spend their money. The new card can be centered around perks such as airport lounge access, lifestyle rewards, and travel benefits.
At the same time, CRED also needs to find a way to keep its costs in check and avoid the expensive giveaways that had been important for its growth until now. If it can achieve a reasonable balance, the CRED-IndusInd card is on track to become one of the most talked-about credit products in the marketplace.
The new CRED–IndusInd Bank co-branded credit card is an exciting development in CRED’s journey from a rewards bill payment app to a broader financial services platform.
