At CNBC TV18’s Global Leadership Summit held in Mumbai recently, a dynamic fireside chat on startups and wealth creation took place between Kapil Makhija, MD and CEO, Unicommerce; Kunal Shah, founder and CEO, CRED; and Amrit Acharya, co-founder and CEO, Zetwerk.
Shah, founder and CEO of CRED, who sold his last company Freecharge 9 years ago, talked about the workings of CRED and said, “I have seen the transformation of the same internet ecosystem and how consumption is completely changing. The biggest change is the confidence that investors, entrepreneurs, and the next set of entrepreneurs are having in the ecosystem. Earlier, it was easy to assume that investors and entrepreneurs were going to amount to nothing, and it was almost a topic of ridicule, but these things are changing so quickly. India’s consumption is still very concentrated when we talk about the top 25 million families; the per capita income drops dramatically. We try to make it easy for our customers to have good financial behavior and make it easy for banks, brands, and merchants to come and cross-sell things on our platform.”
Shah talked about Indian consumers and said, “We command a large market share of the affluent and creditworthy customers of India. In terms of scale, nearly 35-40 percent of all credit cards in India are managed on the platform. We are north of 300 million dollars of revenue. All the monetization happened in these last 2 years, and we are operating in a category where growth margins are quite high. While we see all these startups listing, for the first time we see wealth sharing, a large percentage of these employees in these companies are getting wealthy. This is going to create a new wave; all the executives are now moving to this side, as everybody has tasted the blood of stocks.”
On Cred going public, Shah said, “The best question to ask any startup is when they are going to make a lot of profit. He also addressed that Cred is going to make a billion-dollar cash flow a year when ‘We operate in an environment where a lot of businesses we do are controlled through regulatory environments, and a lot of the time we have to choose business models and choices as the regulatory landscape evolves. We operate in a market where India’s 50 percent of PAT and 50 percent of market cap are in financial services, and all fintechs put together today do not earn more than 0.2 percent of that profit or revenue right now. We are operating in the largest category that exists, and it’s a matter of time.”