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CRED Valued At $2.2 Billion After Raising $215 Million

Indian fintech company Cred has raised $215 million in Series D funding round led by Falcon Edge and Coatue Management, The Economic Times reported on Tuesday. The company is now valued at $2.2 billion, almost thrice the $800 million valuation it had in January. This makes the three-year-old company a unicorn as well as the youngest Indian startup to be valued at over $2 billion.

Existing investors DST Global, RTP Global, Tiger Global, Greenoaks Capital, Dragoneer Investment Group, and Sofina also participated in this round, while Falcon Edge and Insight Partner were new entrants, the report stated.

Cred has so far raised $443 million, with nearly $300 million coming in this year alone. It has been one of the most talked-about start-ups because of the pace at which it has raised money. The company will also initiate a buyback of employee stock option plans (ESOPs) worth $5 million for eligible employees, Kunal Shah, founder and chief executive officer of Cred, told in a note to employees, the report stated. Cred will use the new funds to scale its revenue channels and do more experimentations, Shah told TechCrunch.

Cred is projecting a whopping 208-fold jump in operating revenues, from Rs.52 lakh in the financial year 2020 to Rs.108 crore in financial year 2021, Entrackr reported. But its total losses widened to Rs. 360 crore in 2020, as compared to Rs. 60 crore in 2019.

Catering the top 1%

Cred started off as a credit card payment platform that gave rewards and discounts to members using its service to pay credit card bills on time. It has now expanded to provide a wide range of products and services, including selling an extensive catalogue of premium products and providing credit lines. It currently caters to the affluent by only onboarding users with an Experian credit score above 750. The company claims that its users have a median credit score of 830.

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In just two years, Cred has managed to attract 6 million users and has 35 percent of premium credit card holders as members. The platform also processes 22 percent of all credit card bill payments in India on a monthly basis.

Cred makes money cross-selling products and services for which it receives a commission from banks and merchants on the platform. “Banks historically did better when people went to branches, and they could cross-sell more products. Come to the branch, and I’ll give you a home loan, a credit card, and more. None of us are going to banks anymore; most of our interactions are on an app. So if you could create a superior app that people would like to use, you can cross-sell services that a bank would do,” Kunal Shah told Rest of the World last month.

Also Read

*Correction: The headline has been changed. It erroneously referred to Cred as a two-year-old company. It was founded in 2018, making it a three-year-old company. 

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