Cred, which offers rewards for credit card payments, is finalising a $200 million fund-raise that will make it the second fastest startup to become a unicorn in India, in 29 months. Business-to-business (B2B) e-commerce startup Udaan is to date the fastest to reach unicorn status, in 26 months.
Cred’s eye-popping jump in valuation in just two months after it was valued at a little over $800 million in January indicates the frenzy among investors fueling growth-stage startups in India.
Local growth stage startups have raised around $1.5 billion already in the first 2.5 months of 2021, according to data from Venture Intelligence. Cred will be the fourth unicorn in India this year, after online insurance startup Digit, B2B firm Infra.Market, and software-as-a-service (SaaS) firm Innovaccer.
The new financing will largely be done through existing investors including DST Global, Tiger Global, Sequoia Capital, and Ribbit Capital. A new investor is said to be joining the round.
“It is in the final stages of paperwork and should be completed, formally, in the next two-three weeks. A prominent new investor is joining the round but existing investors are putting most of the new capital,” this person aware of the matter said.
A spokesperson of Cred declined to comment on the matter.
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. Applicants must have a minimum credit score of 750 to be a member. While it started as a credit card payments app, over the last six months it has launched new products that are said to be seeing good traction.
Cred 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. About 1,800 merchants are on the platform, while Cred Pay has around 30 merchants or brands.
According to a source inside the company, Cred is increasingly looking at monetisation with these new products. “The way we (Cred) are monetising is through commerce in the stores section – we get a cut of total sales. The credit line business, through banking and financial services partners, enables us to get a fee when they lend money to our users. And then we have rent payments and other products that are being lined up to boost monetisation,” he said.
Shah 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.