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21 Dec, 12 tweets, 3 min read
Is Kunal Shah a visionary "Not everyone gets" OR does his startup burn cash because...he can!

Sure, Dravid’s "Indira Nagar ka Gunda hoon main!" was iconic!

But are IPL ads worth it for CRED? After all, they spend 50-60% on marketing & still make huge losses 🤯

Let's find out🧵
1. What is CRED trying to do?
2. What’s the visionary move?
3. How does a “Trusted network” help?
5. IPL customer acquisition cost - The Math
6. Verdict

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1/ What is CRED trying to do?

CRED is used to pay credit card bills. In return, users get CRED coins.

With CRED coins, you can claim:
- Rewards
- Travel Benefits

So it’s a simple deals/coupons app?

Nah, that’s not “visionary”.
2/ So what’s the visionary move?

CRED can only be accessed by people with high credit score (>750).

So CRED’s ultimate goal → Build a network of financially trustworthy individuals.
3/ How does a “Trusted network” help?

With a trustworthy network → CRED can overlay many businesses on top.

- P2P lending
- Rent payments
- Helping users invest in real estate

Kunal Shah (@kunalb11) once said: "We're not a FinTech company, we're a lifestyle company"

Now it’s clear — CRED’s main goal is to grow its user base.

Enter → CRED’s IPL ads

We all saw Dravid beat the sh*t out of cars — very entertaining!

But did it pay off?

Let’s do the math 👇

5.A/ The Math (1st part)

- IPL Ads cost about INR 15 lakhs ($20,000) for a 10-second slot.

- These ads are ~20+ seconds long. That’s INR 30 lakhs/ad.

- There are 56 + 4 matches, each with 40 overs. That’s 2400 overs — so, 2400 opportunities to show ads.
5.B/ The Math (2nd part)

- Let’s assume this ad is shown 30% of the time. That’s 720 times.

- Total cost = 720 * INR 30L = INR 216 Crores ($30 million).

- @CRED_club has 3 million users over ~2.5 years ⇒ avg. 143k/month new users.
5.C/ The Math (3rd part)

- Apparently, these ads have increased daily signups by 6-7x. So, in a 2-month period, that is 143 * 6 * 2 = 1.7 million new users.

- The cost of acquisition per user is ⇒ 216 crores/1.7 million = INR 1271 or $17 per user
6.A/ Verdict

So, the cost of acquisition is super high!

If 5% of these users actually generate revenue,

Each user will have to generate INR 25,420 in their lifetime to make CRED money!
6.B/ Verdict

CRED’s monetization models rely on pure volume of users.

But ultimately, it will need an engaged audience and not just volume.

Will CRED be able to do it?


Once the money tap shut, will engagement also disappear?
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