India’s fintech startup Cred enters unicorn club

India's fintech startup Cred enters unicorn club
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India’s homegrown fintech startup Cred, founded by the veteran entrepreneur Kunal Shah, on Tuesday, entered the unicorn club after raising $215 million from Falcon Edge Capital (US), with participation from Coatue Management LLP – Valuing Cred at $2.2 billion. Existing investors DST Global, RTP Global, Tiger Global, Greenoaks Capital, Dragoneer Investment Group, and Sofina also participated in this round.

Around 70 percent of the latest funding round for Cred was subscribed by the existing investors, Kunal Shah. The company is aiming to deploy the fresh capital towards scaling the products that Cred launched last year.

The Bengaluru-based fintech giant last raised $80 million in December from the partners of DST Global, with participation from Sequoia Capital, Ribbit Capital and Tiger Global.

Speaking of the development, Shah said,

“We have chosen the conscious path of focusing on growth over monetization. Today, Cred controls 22% of all credit card payments in the country, and our focus is to grow this market share. We will be busy scaling our growth and current revenue levers, and are obsessed with scaling our user base even if it comes as a short-term loss for a long-term profit,”

According to Mint, an internal memo about the fundraise, Shah also announced a $5 million employee stock ownership plan (ESOP) buyback.

“While most of you were keen on retaining your stock options during the Series C, we are committed to a culture of creating wealth for stakeholders and are, therefore, offering another ESOP buyback opportunity to you. Eligible team members can now sell a portion of your vested shares. The cumulative buyback will be up to $5 million. As the funding helps Cred invest in its future, hopefully, the buyback will help some of you do that too,”
says the memo

Launched in 2018 by Kunal Shah, also the co-founder of Freecharge, Cred helps users pay credit card bills whilst earning rewards. The company also has a Cred Pay product for easy checkouts on its in-app e-commerce platform which has over 1,800 brands – the company claims.

Cred has witnessed losses totaling to INR 360.31 crore in FY20 compared to INR 60.87 crore in FY19, along with an interest of INR 17.56 crore coming from interest on deposits.

On similar lines, Shah in the internal memo also quoted,

“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 cardholders. 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,”

Speaking of existing growth and monetization of Cred, Shah added,

“For monetization products such as lending and commerce, we have seen good traction. And the cohort Cred has chosen is slightly easier to monetize. In the long run, we are focused on the revenue scale and profit collection that we can show,”


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Wajiha Wahab

Part of the editorial team at LAFFAZ, Delhiite by birth, Wajiha possesses a keen interest in reading about startups, accumulating information and presenting the same to the audience impressively.
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