[Watch] In a rare interview, Kunal Shah talks about building Cred, a platform of high-trust individuals, and much more

In a freewheeling conversation, second-time founder Kunal Shah talks about a range of topics from the maturing Indian startup ecosystem to Indian economy to his idea of building an engaged community of high-trust individuals.

27th Aug 2019
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Kunal Shal Cred

Cred Founder Kunal Shah and YourStory Founder & CEO Shradha Sharma

Kunal Shah is an entrepreneur who is constantly raising the bar of doing business.


Last night, his nine-month-old second startup Cred was in the news again for having raised close to $120 million (approx. Rs 861.39 crores) as a part of its Series B round led by fintech fund Ribbit Capital, Gemini Investments, as well as existing investor Sequoia Capital (through its fund, SCI Investments V).


Cred is a members-only app, which incentivises customers and gives exclusive rewards for paying credit card bills in a timely manner.


Other investors participating in this round included Russian tech fund RTP Global (earlier Ru-Net), Asia based investment management firm HillHouse, New-York based investment fund Tiger Global, San-Francisco Greenoaks Capital, DF International, and US-based General Catalyst and Dragoneer.


With this round of funding, Cred’s total valuation stands at around $450 million.

However, Kunal says Cred is more than just a fintech company, as most seem to assume. "People assume that we are a fintech company. No. We are a lifestyle company. We are creating a network of high-trust people and eventually we want the members to do interesting things. Tomorrow, classified could be a potential business for us, or apartment listing.”


One thing you have to grant Kunal Shah is that there’s never a dull moment with him. Whether it is talking about the Indian startup ecosystem or the country’s socialism mindset versus a capitalistic one, he comes up with interesting argument points.


Watch the full interview here.





A seasoned entrepreneur who has witnessed the unfolding of the Indian startup ecosystem from its early days, Kunal is on to his second startup that made news even before he launched it.


As he himself notes on his observation of the Indian startup ecosystem, “We are now witnessing a wave of second-time and third-time entrepreneurs and that is going to be powerful.”


A maverick entrepreneur, Kunal had a successful exit with his first startup Freecharge that he started in 2010 along with Sandeep Tandon.


In 2015, Snapdeal acquired Freecharge for $400 million (at that time it was billed as the biggest venture capital exit in the Indian startup ecosystem). In 2017, Axis Bank acquired Freecharge for $60 million.


Kunal, however, did not rest on his laurels, but occupied himself gainfully understanding the manoeuvrings from the two sides of the investment table -- both from the investor side as well as the founder side.


A curious mind


A heavy dose of paranoia and curiosity is what has worked for him, he tells me.


I asked him about his days at Sequoia and YCombinator, and travelling across the world, especially China, and then finally settling to become a founder again. “I enjoyed my stint at Sequoia and learned so many things. Just sitting in the board meetings and seeing so many things unfold itself was a huge learning,” he says.


But it wasn’t the time when he wanted to be on the other side. He says,


“I realised that at a time when there ia an unlimited amount of money coming into the country, you should rather be building and not be investing. For me, the timing of the market was not for being an investor but being a founder.”


However, at a time when businesses are going after India’s next 500 million population, isn’t Cred going in a different direction by looking at targeting the 30/40 million urban population? Perhaps one of the few non-engineer founders, Kunal’s response is a validation of the benefits of a liberal arts education.


“India’s per capita income does not support any kind of internet business model which offer convenience to the consumer. But global companies love to come to India so that they can build their MAU (monthly active users) and DAU (daily active users) farms. They can add to their global numbers and look good in the public market,” he says.


He supports this argument with a Bollywood example. “If you look at the top three Khans, 80 percent of their box office revenues comes from only 2000 to 3000 screens that are multiplexes. So the data about whether the market is ready for internet business models is definitely skewed towards the 20/30 million. Market future and market readiness are very different. Often we confuse the data.”


The idea man


The idea for Cred rose from months of research and talking to hundreds of people. As Kunal says, he does not believe in the fail fast, pivot concept. “As entrepreneurs, the only currency we have less of is time. So it is best to go prepared.”


And prepared he was. The idea of Cred is to be like a gated community of high-trust individuals and then eventually figure out a way for them to connect and create interesting business models on top of it.


Kunal Shah Cred

Kunal Shah

Kunal emphasises that we as a nation by design are mistrusting, hence building a platform of high-trust makes good business sense. “In whichever nation there is mistrust, there is a concentration of trust. For example, 80 to 90 percent of all Bollywood revenue comes from 20/30 people. Similarly for the market cap. A Tata can do salt to car to furniture,” he adds.


Helps to hunt in packs


For someone who has built himself a credible social profile by not only sharing his diverse views but also keenly observing, Kunal has an interesting take on the Indian startup ecosystem.


“Where we are now is much better than what we were seven years ago. People are more real and forthcoming. There was a time when entrepreneurship felt like an IIT ka exam. People were hiding their answer sheets from each other. In China, I learnt one thing. They all have their notes open, and they are constantly helping each other. And they win and hunt in packs.”


According to Kunal, over here, we have a zero-sum mind. “Sab kuch chupa, chupa ke... We feel we have to score the highest. Wealth is not zero sum, wealth is expanding,” he says. Indeed, for entrepreneurs playing the capitalism gave, it is important to know what capitalism is.


The game in the Indian startup ecosystem is surely changing. As Kunal says second-time founders have better ability to raise capital, build better products, and get better partnerships with merchants and banks. “This will make the game even harder, because the quality of people you need to play this game will be superior now.”



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