Credit card repayment app Cred, the second venture of Kunal Shah, said on January 4 that it has raised $81 million in its Series C funding round led by DST Global.
Existing investors such as Sequoia Capital, Ribbit Capital, Tiger Global, General Catalyst also participated in the round. New investors include hedge fund Coatue Management and Satyan Gajwani, Vice Chairman of Times Internet.
The story behind Cred’s $800-million climb within two years
The round values Cred at $806 million post money, as Moneycontrol first reported on October 9.
As part of the round, Cred has also initiated an Employee Stock Option Plan (ESOP) buyback of Rs 9 crore ($1.2m). Current and former employees were allowed to sell upto 50% of their vested shares in Cred.
“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,” said Kunal Shah, Founder, CRED.
Cred started as an invite-only app. This exclusivity led to its initial success. The app is now open for all those who have credit scores of over 750. In India, a customer's credit score, also known as CIBIL score, is calculated out of 900.
Cred claims to have 5.9 million users, and processes 20% of India's overall credit card payments. Over 35% of premium credit card holders in India are on Cred, with members spending twice what the average credit card user in India spends.
New investor DST Global has also been active in India the last few months. After a quiet 2019 in India,it has invested in online education firm Byju’s and used car online marketplace Cars24, this year. Byju’s, Cars24 and Cred all count Sequoia Capital as an investor.