CRED's contrarian bet: Targeting only India's wealthy in a nation of over a billion

When Kunal Shah founded CRED six years ago, he made what many considered a counterintuitive choice: targeting only India's most affluent consumers in a nation of 1.4 billion people. Now, as questions about profitability mount, the fintech executive is doubling down on that strategy.

"We took a conscious choice of building a distribution-first business where we invested in the brand upfront," Shah said in a recent interview with CNBC-TV18. His company, which began as a credit card management platform, has since expanded into personal loans, luxury retail and even automotive services.

The numbers behind Shah's strategy are compelling. CRED's target market — the wealthiest 30 to 40 million Indians — controls approximately 70 to 80 percent of the country's discretionary spending. This concentration of wealth has shaped every aspect of the company's approach, from its premium brand positioning to its expanding suite of financial services.

But CRED's path to profitability remains deliberately unhurried. The company only began monetizing its services three years ago, choosing instead to focus on building what Shah describes as a "high-quality customer base." This patience appears to be paying off: other technology startups have begun following CRED's lead in targeting India's affluent consumers.

"Our goal is to keep investing in new businesses constantly because we are going for probably the largest revenue and profit pool that exists," Shah said. The company adopts a measured approach to new ventures, designing each additional service to achieve profitability within a few years while maintaining its aggressive expansion strategy.

This balancing act — between growth and eventual profitability — represents a notable departure from the typical trajectory of fintech startups, particularly in emerging markets. As India's digital economy continues to evolve, CRED's bet on the country's wealthy could serve as a case study in alternative paths to financial sustainability in the technology sector.