BENGALURU: Cred, the fintech startup started by serial entrepreneur Kunal Shah, has raised $215 million in new funding, with its valuation soaring to $2.2 billion. The company, which offers rewards for credit card payments, is now officially the second fastest Indian startup to emerge as a unicorn, a moniker for startups valued at $1 billion or more. It achieved the status in just 29 months of launch.
TOI first reported in its March 16 edition about Cred being in the final stages of talks for the new financing with a jump of three times in its valuation in just three months. In December 2020, Cred was valued at a little over $800 million.
In a note to his team, Shah said new investor Falcon Edge Capital and its existing investor Coatue Management have led the funding round, while Insight Partners has also joined Cred as a new investor. Cred’s marquee existing investors like DST Global, RTP Global, Tiger Global, Greenoaks Capital, Dragoneer Investment Group, and Sofina have also participated in this round.
With Cred, India has now seen half-a-dozen new unicorns in less than the first 100 days of 2021, indicating the heavy inflow of capital in India’s digital economy.
“While valuation is a milestone that many celebrate, we view it as a responsibility and an opportunity to create member value. We’ve grown rapidly over the past 2.5 years, with 35% of premium credit card holders and processing 22% of all credit card payments in India on a monthly basis. As the credit card category continues to grow rapidly in India, our opportunity is to imagine new use-cases, empower Cred members to use credit responsibly, and reward them for good financial behaviour,” Shah said in his note. Cred has now raised over $440 million in total since it was started.
Bengaluru-based Cred has nearly 6 million members who use the platform to pay credit card bills. It focuses on a premium set of users and applicants must have a minimum credit score of 750 to be a member. Over the last six months it has also launched new products that are said to be seeing good traction. It has forayed into lending and rent payments. It also has Cred Pay, where merchants can sign up so users can pay them through Cred Pay. Some 1,800 merchants are on the platform, while Cred Pay has around 30 merchants or brands.
42-year-old Shah said the company is conducting another buyback of staff shares from its employee stock ownership programme (ESOP) to the tune of $5 million. “Our growth in the past year has demonstrated the potential value of the high-trust, low-friction platform the Cred team has been building and has earned conviction of investors,” he said separately in a tweet on Tuesday.
He previously founded e-wallet Freecharge, which was sold to e-tailer Snapdeal for $400 million in 2015 in what was one of the largest M&As in the internet sector then.