CRED's valuation skyrockets to $2.2 billion following fresh investment
In March, we had reported that Bengaluru-based fintech start-up CRED was in talks to raise around $200 million. On Tuesday, CRED said it had raised $215 million in a new Series-D funding round led by Falcon Edge Capital and Coatue Management. The company is now a unicorn start-up valued at $2.2 billion. So far, it has raised a total of around $443 million.
CRED founder and CEO Kunal Shah announced the fresh investment
Just three months ago, CRED was valued at $800 million
Barely three months ago after concluding its Series-C round, CRED was valued at around $800 million. The valuation shot up due to immense investor interest for a piece of the fintech pie. CRED allows users to pay credit card bills online in exchange for attractive offers. The service is monetized through an e-commerce platform that charges 1,300+ partner businesses a fee for increased engagement.
Series-D round saw participation from existing and fresh investors
The latest round was led by fresh investor Falcon Edge Capital. It also saw participation from existing investors DST Global, RTP Global, Greenoaks Capital, Dragoneer Investment Group, and Sofina. The start-up reportedly plans to improve its revenue streams using the fresh investment, besides experimenting with new ideas. Recently, CRED launched a rent payment product called RentPay and a personal loan product called CRED Stash.
CEO Kunal Shah equates increasing valuation to growing responsibility
The Economic Times reports that in an employee note, CEO Kunal Shah said that the company is offering a $5 million employee stock option plan (ESOP) buyback opportunity. However, employees were keen on retaining their stock options despite a buyback offer during the Series-C round. Shah said that the company views its growing valuation as a responsibility and an opportunity to create value.
Shah shares quick stats showing how CRED performed in March
CRED's valuation rose partly due to shift toward contactless payments
CRED's meteoric rise in valuation can be explained by the shift toward contactless payment methods including credit cards during the pandemic. While CRED claims the median credit score for its elite user base is 830, several industry commentators have reportedly expressed skepticism at its business model. The 2018 start-up is now one of India's largest, serving around 22 percent of all credit card holders.
