From Freecharge to CRED: Kunal Shah Responds to Criticism Over Loss-Making Startups — “We Need More Job Creators”

Kunal Shah CRED criticism has once again stirred India’s startup ecosystem. Known for his bold statements and unconventional approach to entrepreneurship, Shah has now found himself at the center of a heated debate about profitability, valuations, and what truly defines entrepreneurial success.

The storm was triggered by a viral LinkedIn post questioning why Shah continues to be celebrated despite running loss-making ventures for over 15 years. In a country where startup culture is booming, the debate touched a nerve and sparked strong opinions on both sides.

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📌 The Trigger: A Consultant’s Bold LinkedIn Post

The controversy began when Adarsh Samalopanan, a senior consultant at Deloitte, took to LinkedIn to express his frustration. His post highlighted what he saw as an uncomfortable contradiction in India’s startup narrative—celebrating entrepreneurs who haven’t turned a profit despite years in business.

In his post, Samalopanan pointed out the financial performance of two of Shah’s most well-known ventures:

• Freecharge, founded in 2010, reportedly made ₹35 crore in revenue by 2015, but incurred losses of ₹269 crore during that period.

• It was later acquired by Snapdeal for a whopping ₹2,800 crore. However, within just two years, Axis Bank purchased it for only ₹370 crore—a sharp decline that raised eyebrows in the industry.

The post also examined the more recent numbers from CRED, founded by Shah in 2018. While CRED has become a household name in India’s fintech sector, its financials tell a different story. Despite earning ₹4,439 crore in revenue over nearly seven years, the company has reportedly incurred ₹5,215 crore in losses.

Samalopanan’s core question was simple:

“Fifteen years into entrepreneurship, he has yet to record a single profitable financial year—so remind me again why we celebrate him?”

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🔁 Kunal Shah Responds: “We Need More Job Creators”

Rather than brushing off the criticism, Kunal Shah responded directly on LinkedIn. He began by acknowledging the validity of the point being made:

“Absolutely correct. We should be celebrating thousands of entrepreneurs who have created very profitable companies without external capital.”

However, he then shifted the conversation from profits to a broader societal perspective on entrepreneurship. According to Shah, in a future shaped by artificial intelligence and automation, being a job seeker may become riskier than being a job creator.

“We should celebrate everyone who is taking risk in life and being an entrepreneur… We need more job creators.”

This reframing invited a larger discussion: Is profitability the only measure of success in today’s fast-evolving world?

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🏦 Freecharge: An Early Success With a Complex Legacy

To understand the context of the Kunal Shah CRED criticism, it’s important to look back at Shah’s earlier venture—Freecharge. Launched in 2010, the platform was a pioneer in digital wallet and mobile recharge services. It was one of the earliest fintech players in India before the arrival of UPI and the explosion of digital payments.

Freecharge gained popularity quickly and became one of the most talked-about startups in the country. However, despite its strong user growth, it failed to turn profitable. The acquisition by Snapdeal in 2015 for ₹2,800 crore was seen as a major win. But just two years later, the platform was sold to Axis Bank at a fire-sale price of ₹370 crore.

Critics say this indicates overvaluation and lack of long-term sustainability. Supporters argue that building early infrastructure and trust for digital payments was more important at the time.

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💳 CRED: Disrupting Credit Culture or Chasing Valuation?

Shah’s second big venture, CRED, aims to revolutionize how Indians manage credit card payments. By rewarding users for timely bill payments, CRED appeals to a specific segment of affluent, credit-conscious users.

Despite massive funding and high visibility, CRED has not achieved profitability. The firm has consistently recorded losses even as its revenue grows.

Critics call CRED a “valuation game”—designed more to attract investor money than build a sustainable business.

Supporters argue that Shah is playing a long game, just as companies like Amazon and Uber did, prioritizing market share, user behavior change, and trust over short-term profits.

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🧠 Public Reaction: Divided Opinions

The Kunal Shah CRED criticism quickly spread across LinkedIn, X (formerly Twitter), and startup forums. While some supported Samalopanan’s tough questions, many came to Shah’s defense.

✅ Supporters Said:

• “Kunal Shah has built platforms that moved India’s digital payments and credit culture forward.”

• “He’s generated wealth for investors, created jobs, and inspired young entrepreneurs.”

• “Amazon lost money for years. So did Uber. Vision sometimes comes before profit.”

❌ Critics Replied:

• “Valuations without profits are meaningless. It’s a bubble waiting to burst.”

• “We shouldn’t celebrate losses just because a brand is trendy.”

• “This mindset encourages more startups to chase headlines over fundamentals.”

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📈 What Defines Entrepreneurial Success Today?

The debate highlights a bigger issue facing India’s startup ecosystem—how do we define success?

Traditionally, profitability, sustainability, and cash flow were the key indicators. But modern startups—especially those in fintech, edtech, and SaaS—often prioritize growth, user engagement, and valuation.

VC-backed startups often take 7–10 years to break even, especially in competitive sectors. In this light, some argue that Shah is still on the right track.

However, the growing criticism reflects public fatigue with loss-making unicorns, IPO disasters, and inflated valuations that fail to translate into value for investors or customers.

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🤖 Shah’s Bigger Message: Preparing for a Post-AI World

Shah’s response wasn’t just about defending himself—it was a commentary on future work trends.

“In the post-AI world, being a job seeker will be more risky.”

This idea taps into a growing fear that automation, machine learning, and generative AI will replace many traditional jobs. In such a world, entrepreneurs—especially those who create jobs—become even more vital.

Shah argues that building companies, even if they aren’t profitable early on, contributes more to the economy than people realize—by training talent, driving innovation, and shaping user behavior.

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🔍 So, Should We Celebrate Kunal Shah?

The answer depends on perspective.

• If you measure success by quarterly profits, Shah’s ventures fall short.

• If you measure impact by market transformation, job creation, or behavioral change, Shah has arguably succeeded more than most.

There’s no denying that CRED and Freecharge influenced India’s digital financial behavior at a time when most people were still skeptical of online transactions. That matters—even if the balance sheet doesn’t show it yet.

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📢 Final Thoughts: A Broader Conversation

The Kunal Shah CRED criticism has opened a valuable conversation. Not just about one entrepreneur—but about the entire startup narrative in India.

• Can long-term impact justify short-term losses?

• Should risk-takers be celebrated even if they fail financially?

• What balance should be struck between valuation, vision, and viability?

As India continues to emerge as a global startup hub, these questions will become even more important. And while Kunal Shah may not have all the answers, he’s certainly helped ask the right ones.

Source: Mint

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