Meta announced a $900 million investment in India-based fintech company Cred. The move will see Cred’s founder, Kunal Shah, become the new head of WhatsApp, taking over from Will Cathcart, as Meta builds on its business opportunities in India.
As reported by Bloomberg, Meta is buying a 20% stake in Cred, which is currently valued at around $4.5 billion.
Cred is a rewards app that provides perks to consumers with high credit scores.
As explained on the Cred website: “Cred’s suite of products is designed to help the creditworthy fast-track their financial & lifestyle progress. We partner with premier brands to offer unparalleled experiences and rewards to our members.”
Cred members can also earn cashback on their purchases and improve their credit scores. The app currently serves more than 25 million members.
Meta clearly sees this partnership as a means to drive more business activity in WhatsApp. India is WhatsApp’s biggest user market, with over 858 million WhatsApp users, according to World Population Review.
The challenge for Meta, and every social app looking to capitalize on India’s market, is that gaining traction with local businesses is a challenge, with government regulators wary of outside apps and platforms taking advantage of, and potentially swallowing local businesses.
Meta has tried to side-step this by acquiring India-based businesses such as Meesho, a popular social commerce platform that Meta integrated into WhatsApp. Meta also invested $6 billion into India-based internet provider Reliance Jio in 2022. However, these investments clearly haven’t paved a clear path for Meta to boost its business operations or capitalize on its reach and presence in the local market.
Maybe the acquisition of Cred will change things. Meanwhile, the appointment of Shah as the new head of WhatsApp could also help to ease foreign investment concerns and clear the path for expanded opportunity.
Shah confirmed his appointment in a LinkedIn post, in which he also said: “…the delta between WhatsApp today and its full potential is massive. I look forward to working with Mark, Chris, and the leadership across Meta for the next step in WhatsApp’s journey.”
With such a huge presence in India, and improved knowledge of the local market, Meta could now be better placed to capitalize on WhatsApp’s unmatched position. The company could also leverage the capacity of Cred to drive new rewards programs that incentivize WhatsApp commerce, and drive stronger take-up of WhatsApp for expanded use.
