Cred Raising $100 Mn From Hillhouse Capital, Existing Investors: Report

Bengaluru-based credit card bill payment startup Cred is reportedly looking to raise $100 Mn (INR 692 Cr) from China-based venture capital firm Hillhouse Capital and its existing investors which include Sequoia Capital, Ribbit Capital, Apoletto Asia among others.

Founded by Freecharge founder Kunal Shah, Cred is looking to increase its valuation to $400 Mn with new funding, which is nearly 5x the $75 Mn it was valued at earlier.

Hillhouse will likely pick up a small stake with Sequoia taking the lead in the round. Sequoia currently holds more than 15% in Cred.

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.

Cred 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.

Recently, Cred was also testing Unified Payments Interface (UPI)-based digital mode of payments to allow its users to pay their credit card bills. 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.

As one of the hottest sectors of the Indian startup ecosystem, fintech has been bringing investor as well as customer attention. Inc42 in its Annual Tech Startup Funding report 2018 noted that fintech startups raised $1.4 Bn across 121 deals in the year with top-five funding grossers being PolicyBazaar, Pine Labs, LendingKart, PhonePe and ClearTax.

UPI has been the talk of the nation and has recorded 800 Mn transactions in March 2019. Google and the Boston Consulting Group estimated that the digital payments sector of India is set to reach $500 Bn by 2020, contributing 15% of India’s GDP.

Kunal Shah is a serial entrepreneur who earlier launched ventures such as PaisaBack, a cashback and promotional discount campaign platform for retailers; and FreeCharge, a coupon-based app for mobile recharge.

While he shutdown PaisaBack to launch FreeCharge, Kunal Shah sold the latter to Snapdeal in a whopping $450 Mn deal in 2015. Snapdeal then later sold FreeCharge to Axis Bank.

Shah’s second innings as an entrepreneur has been lucrative since the venture started creating buzz last year. After securing a seed round of $25 Mn from investors such as Sequoia and Ribbit, Shah launched the beta version of the Cred app in November 2018.

[The development was reported by ET.]