Cred joins unicorn club with $215 million fund raise

Valuation touches $2.2 bn; startup initiates ESOP buyback worth $5 million

Fintech startup Cred is the latest homegrown company to enter the unicorn club with a $215 million Series D funding which was led by new investor Falcon Edge Capital and existing investor Coatue Management. While Insight Partners joined the company cap table, existing investors DST Global, RTP Global, Tiger Global, Greenoaks Capital, Dragoneer Investment Group, and Sofina also participated in the round.  

With this raise, Cred’s post-money valuation touched $2.2 billion. Cred will also offer its team another ESOP buyback opportunity, with a cumulative value of $5 million. The Bengaluru-based startup has so far raised over $440 million.

“We see our fundraise as a responsibility to build a rewarding ecosystem  for Cred members and an opportunity to share value with stakeholders. Hence, happy to also announce a $5 million ESOP buyback for the team members who have contributed to the Cred journey,” announced founder and serial entrepreneur Kunal Shah on Twitter, who launched the company in April 2018. He had earlier founded Freecharge in 2010 which was acquired by Snapdeal in 2015 for $450 million. 

With the credit card category expanding in India, the company sees it as a massive opportunity to shape responsible behaviour, imagine new use cases, and create a rewarding platform for members. The country currently has over 55 million credit card users and the industry is expected to grow at a CAGR of 25 per cent for 2020-2025.

“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 per cent of premium credit card holders and processing 22 per cent of all credit card payments in India on a monthly basis,” said Shah in an emailed letter to Cred employees.

The Bengaluru-based startup is a members-only credit card management and bill payments platform that rewards you every time you pay your credit card bills. It has additional features such as RentPay which allows members to pay monthly rent with their credit cards, Cred Cash which is an instant credit line and an ecommerce marketplace Store to use Cred coins.

In two years, the Cred community has crossed over 6 million individuals with a median credit score of 830. It currently processes over 20 per cent of all credit card bill payments in India with more than 35 per cent of premium credit card holders in India on the platform. These members spend 2x of the average credit card user in India. 

In January this year, Cred had raised $81 million led by new investor Falcon Edge Capital and existing investor Coatue Management. The startup had registered a loss of Rs 360 crore in FY20 as compared to Rs 60 crore in FY19.

Cred member spend progress in March

45% members who improved their credit scores

Rs 185 crore: hidden charges detected

Rs 19.4 crore: cash-back earned by paying bills on time

898: rewards and products claimed

Rs 63.7 crore: late fees avoided with payment reminders