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Exclusive: CRED in talks to raise funding, eyes $6.5 bn valuation

In the last one and a half years, CRED has built a loan book of over Rs 2000 crore, likely with low defaults since it caters to highly credit-worthy customers.

February 09, 2022 / 08:01 AM IST

Fintech startup CRED is in talks to raise about $300 million valuing it at over $6 billion, an aggressive valuation for one of India's most intriguing technology companies as investor sentiment remains strong despite tech stocks falling globally, sources said.

CRED, founded by serial entrepreneur Kunal Shah, started in 2018 for India's most credit-worthy individuals to pay their credit card bills and earn points. It has since expanded into lending, e-commerce payments, advertising for brands, and providing short-term credit via Buy Now Pay Later (BNPL) options.

The new round of funding will likely be led by a crossover fund from the Middle East, while existing backers Tiger Global Management and Falcon Edge Capital will also double down on their bets, sources said. A CRED spokesperson did not respond to email queries from Moneycontrol.

In the last one and a half years, CRED has built a loan book of over Rs 2000 crore, likely with low defaults since it caters to highly credit-worthy customers. Its payments business CRED Pay also processes transactions worth $500 million a year - Gross Merchandise Value on which it doesn't make money yet.

CRED is also pitching to investors that it can become like Affirm, the US-based company which allows BNPL for online transactions. Affirm recently listed with a market cap of over $24 billion.

CRED was valued at $4 billion in October last year when it raised $251 million from its existing investors.

Moneycontrol reported in November last year that it was in talks to acquire 2 startups- Dineout and Wint Wealth - as it seeks to offer more services to its over 7.5 million users. While Times Internet-owned Dineout helps users discover restaurants, offers discounts and complimentary dishes with Dineout Passport, Wint Wealth is an alternative investment platform that offers users better stable returns than a fixed deposit but less than the stock market.

Shah, one of India’s best-known new-age entrepreneurs and a prolific angel investor, is also ramping up CRED's commerce play by onboarding multiple online-only consumer brands on its platform. It recently introduced a zero commission CRED store onboarding platform, waiving off listing fees for onboarding and commissions from any sale for all brand partners.

While CRED has rapidly expanded into payments, lending, investment, and commerce, it remains to be seen how it will effectively cross-sell, upsell and monetise each of these engines. Shah, in a recent tweet, seemed to suggest that CRED should be perceived as a super app, being built like a web series, where one character is introduced at a time and has a connection with previous characters.

"Many companies that are trying to become super apps from the word go are becoming like a buffet at a rich wedding, where you don't understand 90% of dishes," he tweeted.
M. Sriram
Chandra R Srikanth is Editor- Tech, Startups, and New Economy