Kunal Shah explains why CRED is not profitable!

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Kunal Shah finally broke the silence on why CRED is not profitable, and it made us go back immediately to this movie clip from “Hera Pheri” 😛

Now jokes aside, CRED is probably one of the most talked about startups today. CRED’s $800M funding and $6.4B valuation definitely get people talking.

But beyond the shiny curtain, CRED’s financials are a total mess.

In FY22, CRED chased quick growth to 4x their revenue. But, their expenses also almost tripled to reach a loss of Rs. 1280 crores!

The best part is that close to Rs 973 crores were spent on marketing CRED. That’s 57% of all their expenses 🤯

Here’s what Kunal Shah had to say on why CRED is not profitable.

Now, there may be merit to what Kunal is saying here. Category creation does result in loss-making years initially.

But, then the question comes: To what point can a company sacrifice their basic unit economics to finally focus on profits?

Well, to answer that question for yourself, you must know about some common startup finance terms.

So, let’s take a simple quiz to brush up on some definitions while having fun! 🎉

Question 1/8
In the startup world, what does the term “bootstrapped” mean?