CRED Raises $81 Mn In Series C; Initiates ESOP Buyback Of $1.2 Mn

Bengaluru-headquartered fintech startup CRED has raised $81 Mn in a Series C round led by existing investors DST Global, Sequoia Capital, Ribbit Capital, Tiger Global and General Catalyst. Besides these investors, the Series C round also saw Sofina Capital, Coatue and Times Internet’s Satyan Gajwani  investing further in the company. 

Founded by Kunal Shah in 2018, the investment makes the company at a post-money valuation of about $806 Mn. Besides the funding round, CRED has also launched an ESOP (employee stock ownership plan) buyback scheme worth INR 9 Cr ($1.2 Mn) to its employees, which is the company’s first ESOP liquidity programme, two years after launch. 

Last month, CRED had raised $80 Mn in a round from its existing investors besides $120 Mn back in August 2019. Besides the credit card payments and rewards platform, CRED has recently entered the D2C space with its marketplace and also opened up its rewards ecosystem for third-party etailers. In addition, the company is looking at other fintech products such as lending and personal finance management. 

“As we raise funds to support our next phase of growth, it’s important to acknowledge the role that employees have played in our success. We are committed to enabling wealth-creation opportunities for them and have allocated 10% of our captable allocated for ESOPs even at the Series C stage.  I am grateful for their conviction, as well as that of our investors, and am focused on creating value for them as the product and business evolves,” CRED founder Shah said in a press statement. 

The company claimed that in the last two years, its community has grown to over 5.9 Mn users with a median credit score of 830. 

In December, CRED launched CRED Pay to allow users to use their CRED reward coins across ecommerce sites and unlock discounts. The company is in the process of closing deals with ecommerce partners such as BigBasket, Dineout and ixigo. It partnered with Razorpay and Visa to develop the features. Before launching the payment feature, after a pilot project with over 30 merchants including the likes of Vahdam Teams, The Man company,  Epigamia and Man Matters among others. 

The company claimed that these merchants experienced larger basket sizes and improved customer satisfaction. The ecommerce play and the CRED Pay platform form the next focus areas for CRED as it looks to monetise its high-value user base. 

Other digital lending players that compete with CRED include the likes of LoanTap, EarlySalary, PaySense, ZestMoney, among others. A report revealed that India’s digital lending market has the potential to become a $1 Tn opportunity by 2023 adding that individual lending is estimated to record a 30%year-on-year (YoY) growth, to reach $50 Bn.