The Bengaluru-based fintech startup is in advanced stages of raising $200 million in a round led by Falcon Edge’s Alpha Wave Incubation Fund, ascribing the two-and-a-half-year-old business a valuation of nearly $2 billion, people close to the matter said. Existing investors DST Global, Ribbit Capital, Tiger Global and Sequoia Capital are also part of this deal.
was the first to report the funding news.
Cred had raised $80 million at a valuation of $800 million in November last year. The latest financing would more than double the company’s valuation in less than four months, amid increased demand among investors for a piece of India’s growth-stage fintech startups.
Queries emailed to Falcon Edge remained unanswered as of publishing this story. Cred didn’t comment.
Founded in late 2018, Cred had raised its Series A round in August 2019 at a valuation of $450 million. Its seed round of $30 million is one of the largest in India’s startup ecosystem. It caters to the top percentile of India’s nearly 60 million credit card users. Since the coronavirus outbreak last year, credit card usage has spiked—fueled by demand for revolving credit and surge in digital payments.
The fintech startup helps its nearly six million customers make credit card payments on time. Doing so gets them Cred Rewards for discounts on Cred Store, an e-commerce platform. The company charges its partner businesses on Cred Store a prescribed fee for increased engagement. It also charges its bank partners a cut of the fee for improved fiscal discipline of its customers for new lines of credit availed through the platform.
“The value is also in owning the consumer experience…both merchants and financial institutions value this. Moreover, a third of Cred members access the platform more than three times a month,” according to a source.
Cred is now piloting a loan product for a subset of its customers that fits preset criteria. It has also started offering merchant payments and rent solutions to its customers. This will help the company monetise its traction, according to sources in the know.
The startup has over 1,300 brands as members including Samsung, Myntra, Curefit among others. During last year’s Indian Premier League, the company launched an aggressive marketing campaign to target credit-worthy customers. It has on boarded 3 million customers in the last two years.