Cred Eyes A Valuation Of $500 Mn, With A $125 Mn Series A Funding: Report

Kunal Shah’s second fintech startup, Cred is reportedly in talks to raise a $125 Mn Series A funding. This new round is expected to increase the Cred’s valuation somewhere between $450 Mn and $500 Mn.

According to a media report which cited sources close to the matter, Sequoia Capital, Ribbit Capital and billionaire Yuri Milner’s Apoletto Asia have already invested $65 Mn in the company.

Further, Hillhouse Capital and Tiger Global also reportedly participated in this funding round. In April, Hillhouse Capital, Sequoia Capital, Ribbit Capital, and Apoletto Asia were reported to have invested in Cred’s $100 Mn funding round.

Earlier this month, General Catalyst were also looking to invest in Cred’s upcoming funding deal. 

Last week, Cred’s Ministry of Corporate Affairs filings showed that the company has raised a bridge Series B round of INR 27.55 Cr ($4 Mn) from Sequoia Capital India. The company issued 20,179 Series B CCCPS shares priced Rs 13,653.31 each.

Interestingly, prior to this round, the company has been issuing Series A and Series A1 CCPS at INR 3010.42 till April 2019. The sudden jump in the premium value of each share has come based on the valuation of March 31, 2019.

The company said in its filings that the Bridge Series B funds will be used for growth, expansion, marketing and general corporate activities of the company. With this investment, Sequoia currently has 12.68% stake in Cred.

Launched in 2018, Cred is a members-only app which gives exclusive rewards for paying your credit card bill in a timely manner. Eligible users with good credit scores can use the app to understand and navigate their credit card statements, particularly with regard to hidden charges, and they are rewarded accordingly.

The company has partnered with brands such as Airbnb, Cure.fit, BookMyShow, Urban Ladder, FreshMenu and ixigo among others for rewards, experiences and upgrades every month. The banks associated with Cred include HDFC, ICICI, Kotak, Axis among others.

In the long run, the company plans on building its consumer base through credit card bill payments and rewards and then develop high-end loyalty and offer other services, including insurance.

Cred has also been tying up with influencers for its promotional activities and has been spending heavily on rewarding its bill paying users. However, not everyone has been satisfied with the rewards as well. User reviews show that the engagement is slowing down, citing reasons such as payment addition to actual cards needs 1-2 working days, lack of useful offers and more. 

Kunal Shah is a serial entrepreneur, known for his coupon-powered mobile recharge platform, Freecharge, which was bought by Snapdeal in 2015 for $450 Mn. 

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