Born with a silver spoon, this entrepreneur declined to join the family business and inherit the family wealth. Today, we are going to go over the success story of CRED and talk about its founder Kunal Shah.
Books that changed his life and that may change yours. Kunal Shah conquered the Fintech sector of India, having founded two successful payment processing companies. He was born into a wealthy business background and had the opportunity to join the family line of business, but he declined and followed his path. But Kunal made up his mind to pursue his dreams. Being successful also means you have to tow the unpopular path and chart your cause.
Joining the family business would have been a comfortable choice for Kunal, but we bet he would not be as successful as he is today if he had joined the family business. Before we go deeper into the journey of Kunal Shah, let us look at his early life. Born on 20th May 1983, Kunal is one of the Indian Millennials using technology to make life easier for Indians. He attended Wilson College in Mumbai, India where he obtained a bachelor of arts in philosophy. Coming from a business background and very much interested in business, he enrolled at the Narsee Monjee Institute of management science to obtain an MBA.
Kunal Shah Biography:
Like most entrepreneurs, Kunal later dropped out of the program to pursue his career. On the reason he dropped out, Kunal didn‘t like how the courses were taught. He was not there to acquire the MBA but rather to gain skills to develop his business. To further explain his view on education and why he dropped out, an article published by livemint.com revealed that Kunal relates with the lead character in the movie “3 idiots”. In this movie, the lead character questioned the education system of his school that was based on theories and fewer practicals.
He later charted a different path to success. Oops! We are not about to gist you the movie; you can find the movie online and watch it. Before going mainstream on entrepreneurship, Kunal did different jobs ranging from Mehendi Cone supplier, Data Entry, chemist, internet tutor, cyber café, and even an ASP programmer. The most remarkable of all was his role as a junior programmer at a business process outsourcing startup. He did so well that his boss promoted him to a senior role, a business leadership role. He worked in this company for ten years and grew the company outsourcing channels to over 1200 distributors in that time.
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The owner of the company described Kunal Shah as hardworking and energetic. Kunal’s hard work and energy would later pave the way to his own startup company. Can you guess who his co-founder was? His former boss! Kunal was so good that his boss didn’t want to part ways with him, even if it meant investing in his startup and being a cofounder. They both founded FreeCharge and grew it into a multi-million company. But before Freecharge, there was Paisaback. Kunal’s first-ever startup was called PaisaBack, and the same idea behind PaisaBack evolved into FreeCharge. Let us take a look at these similar companies.
Kunal Shah Carrer:
The entrepreneurship journey Who does not like free things? I bet you would jump on an Amazon voucher if we were to offer one. People are likely going to jump on something if it would not cost them some money. Hence the reason why business terms like auctions, coupons, discounts, and other alike catch attention. This was the same concept that inspired Kunal’s startup companies. At the time in India, the term ‘free’ was becoming a household name. With a high poverty rate, citizens are likely going to fall for anything tagged free.
Kunal Shah saw beyond the concept of free to know that nothing is indeed free. Like the saying, & Nothing is free even in Free town. Kunal jumped on the free trend and built his first startup off it. While still working for a company, he launched Paisaback, promising Indians cash backs on any purchase they make through his platform. You may be wondering how he achieved that. Kunal partnered with top brands like Amazon, Snapdeal, and other online marts, promising them high traffic from his website, but in return, they give a discount to anyone who buys through their website.
Paisa back was a big deal back then, but it did not take long before other brands copied the idea and became more popular. Bigger online players like MySmartphone, CouponDunia, and others took over the market. As a well-grounded entrepreneur, Kunal did not give up; he went back to the drawing board and birthed an improved version of Paisaback.
Kunal Shah Struggle:
This time not as a referral website but as a service website. Freecharge would enable Indians to perform services like bill payments, subscriptions, and all types of service payments from top brands like KFC, McDonald’s, Cinemas, and so on. The bait for customers remains the same! Use our services and get discounts on each of your transactions.
These kinds of services may be popular now, but in 2015, it wasn’t that popular. Like we mentioned earlier, the former boss of Kunal saw his energy and decided to become his partner. He invested in the idea and became a cofounder. They were off to a slow start as investors did not want to invest in the idea, but Kunal did not give up! A year after they launched, they raised their first round of $3 million from Sequoia Capital.
They later raised over $120 million in the next round of funding. Kunal’s success at Freecharge continued booming, and by 2015, Freecharge was acquired by Snap deal for $400 million. The acquisition came with the appointment of Kunal as the CEO, but he left the company in 2016 to pursue other things.
Spoiler Alert, Snapdeal would later sell Freecharge to Axis bank for just $60 million. This amount was 80% lesser than the amount they bought it. What could have been the case? Could the exit of Kunal have led to the depreciation?
Moving on to bigger things. Three years after he sold Free charge to Snap deal, Kunal returned to the startup scene with yet a similar idea. One would think he would start something entirely different, but Kunal had mastered the free service concept in India and innovated around it. CRED, quite different from Freechrage uses a credit scoring technology to reward users for consistently paying their bills on time using their service.
It targets people who are credit-worthy and reward them with redeemable coins and gems. To shed more light on CRED CRED is a mobile app that lets its users manage their cards in one place. The App aggregates their different bills and reminds them of the due date for both renewal, purchase, and other designated services.
For each of the Bills they pay, CRED rewards them with tokens. As you can see, this is simply a tweaked version of Freecharge and Paisaback. CRED boasts of having data of the most trustworthy Indians on its platform. It requires customers to have a credit score of up to 750 before their membership can be approved.
Freecharge to Cred:
This model allows them to retain only the top financially worthy, citizens. The continued success Kunal has achieved with CRED should not be a surprise given his huge success as Freecharge. After launching CRED in 2018, it raised its first funding of $30 million the same year. CRED and Kunal have since then raised $256 million in different rounds from 26 investors. The company is heading to becoming a unicorn with a current valuation of $800 million. This achievement is remarkable within just two years of CRED’s existence. Show us a company that has achieved this feat in that time, and we shall wait! Joining the billionaires club.
While Kunal Shah continues to build wealth off the Indian free service ideologies, Kunal also explores other avenues for wealth creation. He made a lot of money from the sales of FreeCharge and money made from his current company, CRED. He channels this wealth into funding other small businesses.
As of March 2021, Kunal has invested in over 56 companies and exited from 7. He is worth a staggering $806 million. It is only a matter of time before he hits the $1 billion mark. He may be successful today, but he faced setbacks at the beginning. His first business failed due to stiff competition from big brands. His second business didn’t get funding at the initial time. Investors didn’t believe the recharge business was a good one due to low margin and competition.
But Kunal proved them wrong by relaunching the same ideas using different concepts and being successful at them. Books Recommendation As is our tradition, we share with you books that changed the life of the entrepreneurs we feature. For today, we will be sharing with you the books that Kunal Shah read that motivated him and made him successful in business. Make sure to check them out. Sapiens, written by Yuval Noah Harari This book explores the generality of Humanity. It shares the history of Humanity and our journey over the years.
Future of CRED:
It highlights the happenings starting from the stone age down to the silicon age. This book goes back in time to explore the human race and the other species of humans that lived thousands of years ago, how they all evolved to what we have today, and the next evolution that could happen. This book will spark your curiosity and open you to a deep knowledge of humankind and where we all fit in the grand picture. Zero to one written by Peter Thiel and Blake Masters Arguably the most read book in the startup space, Kunal Shah seems to be a fan of this Peter Thiel masterpiece.
The book teaches how to build the next big idea. It describes the startup culture most top founders practice to attain success. As you may know, Peter Thiel is a fan of novel ideas, and in this book, he teaches how to build one. If you are looking to build novel products, Kunal recommends this book for you. Thinking, fast and slow, written by Daniel Kahn e man This book did a great job of explaining how humans make decisions. It dissects the processes that facilitate our thought and decision-making processes.
In a world where we are advised to follow our intuition, this book also teaches us the instances where we cannot trust our intuition. It’s an amazing read to gain self-mastery. Tools of titans, written by Tim Ferris To write this book, Tim interviewed over 200 world celebrities from entertainment, sports, and business. Some of the notable names are Arnold Schwarzenegger, Jamie Foxx, and other celebrities across industries. If you are looking to replicate what worked for other successful people, this book is a sure read. Chart your path, follow your dreams, and read great books while at it.
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