Cred valuation nearly doubles after $250-million funding
The round nearly doubles the Bengaluru-based startup’s valuation from $2.2 billion in April when it raised $215 million. The startup was valued at $800 million less than a year ago, when it raised $80 million in November 2020.
The round saw two new investors – Marshall Wace and Steadfast Venture Capital – joining the cap table of serial entrepreneur Kunal Shah’s fintech startup. Existing investors, including DST Global, Insight Partners, Coatue and Sofina, also participated in the round.
Earlier this year Cred had launched a peer-to-peer (P2P) lending platform for its members called the Cred Mint in partnership with P2P non-bank Liquiloans. Those investing in the product will earn interest of around 9%, while loans will be disbursed at a rate of 12-13%.
As per media reports, the company plans to use the funds to grow its existing range of products and expand financial services offerings for customers.
Since its launch as a credit card repayment platform in 2018, Cred has forayed into e-commerce, lending, payments, and investment segments. “About 25-30% of all credit card bill payments in India are happening through the platform,” Shah had told ET in an interview in August. “The commerce business is doing well, and we have over 2,000 brands. Our payments piece, which is young, is also growing 60% month on month.”
Cred, which launched its lending play in 2020 in partnership with private sector lender IDFC Capital First Bank, had in August said its loan book is now at over Rs 2,000 crore, with non-performing assets at under 1%.
Shah previously founded bill payments platform Freecharge which he sold to Snapdeal in 2015 for $400 million before launching Cred. The Bengaluru-based startup raised its Series A round in August 2019 at a valuation of $450 million. Its seed round of $30 million was one of the largest seen in India’s startup ecosystem.
The company charges partner businesses on its Cred Store – an ecommerce platform — a prescribed fee in return for increased engagements. It also charges its bank partners a cut of the fee for improved fiscal discipline of customers for new lines of credit availed through the platform.
The startup has over 1,300 brands as members including Samsung, Myntra and Curefit. It has on-boarded around 3 million customers over the last two years, as per data shared by the company.
Indian fintech firms in 2021 have seen high-profile investments notably at Pine Labs and Razorpay with firms such as Paytm, Mobikwik and Policybazaar set to make public market debut this year.