Cred valuation at $4 bn after $251 mn fundraise
BENGALURU: Cred, the fintech app founded by entrepreneur Kunal Shah, raised $251 million in a Series E round co-led by Tiger Global Management and Falcon Edge Capital at a valuation of $4.01 billion, two people aware of the development said.
The fundraise nearly doubled the Bengaluru-based startup’s valuation from $2.2 billion in April when it raised $215 million.
New investors in the Series E fundraising included Londonbased Marshall Wace and Steadfast Venture Capital, while existing investors, including DST Global, Insight Partners, Coatue and Sofina, also participated, the people cited above said, requesting anonymity.
A spokesperson for Cred confirmed the fundraising without giving details.
The company plans to use the funds to grow its existing range of products and expand financial services offerings for customers, said one of the people quoted above.
Investor interest in the company, however, remains undiminished, with several entities approaching the company for potential investments at a valuation of $5-6 billion, a third person said on condition of anonymity.
Cred said it has no immediate plans to raise more funding.
“Cred is fortunate to have consistent inbound interest owing to the value created for investors and team. However, the information that Cred is looking to raise another round is wrong,” the company said in an emailed response to Mint’s queries.
Cred was launched in 2018 to help users pay credit card bills easily and earn rewards. It has since expanded to lending through Cred ‘Cash’ and enabled online commerce and brand discovery through its ‘Store’ and ‘Commerce’ platforms.
Currently, Cred ‘Cash’ provides members with an instant line of credit, with interest rates ranging from 12% to 15%, and partners with non-banking finance companies (NBFCs) to fund these loans. The platform counts IDFC First Bank among others as its NBFC partners.
The company is also in talks to partner with Japanese financial services provider Credit Saison for its Cred ‘Cash’ offering, the third person said.
Further, the person mentioned above said that the company has facilitated a loan book of ₹3,000 crore for its partners.
Cred declined to comment on the partnership and the loan book.
In August, Cred launched peer-to-peer lending for members on its platform through the newly-launched Cred ‘Mint’ feature. The feature allows Cred members to lend to other members on the platform at 9% interest.
Its other lines of business include payment product, Cred Max, which allows credit card holders to pay rent and school fees for a small transaction fee.
In an August interview, Kunal Shah said Cred ‘Commerce’ had 2,000 brands and 600,000 customers used its ‘Max’ product. The focus was on establishing the right fit for these products, Shah added.
Indian startups are witnessing heightened interest from global and domestic investors this year. In the nine months ended September 30, equity investments in these startups have crossed a record $24 billion..