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Kunal Shah's Cred valued $800 million with DST partners funding

Cred, formed in 2018, has raised $80 million at a valuation of $800 million.

December 01, 2020 / 12:34 AM IST

Credit card repayment startup Cred has raised $80 million in funding from partners of DST Global, already an investor in the company, and others, valuing it at $800 million, up from $450 million a year ago, two people aware of the matter confirmed to Moneycontrol.

A startup is termed as 'unicorn' when it reaches at least $1 billion valuation. With this funding round, Freecharge co-founder Kunal Shah's second venture is now valued at $800 million.

Cred’s existing backers—Sequoia Capital, Tiger Global Management and Hillhouse Capital and others, have also participated in the round.

Moneycontrol first reported Cred's funding talks with various investors.

“Discussions are still going, and documentation is not yet done," said one person aware of negotiations, who did not want to be named.

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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.

What is Cred? 

Cred is an app beneficial for customers with multiple credit cards. It tracks credit card due dates and alerts customers of their upcoming payments dates. One can clear their credit card dues on Cred using UPI and other payment options. Less than 60 million people in India have credit cards making the category lucrative for advertisers and businesses chasing consumer wallets.

Cred, by trying to get these people on its platform, offers a ready market for businesses to target these high-spenders.

In lieu, Cred offers customers points that can be redeemed on its platform itself with participating businesses. For example, one can part pay a holiday, electronic items, services, food, beverages and grooming products using Cred points.

A Cred spokesperson declined to comment.

Cred has been aggressive in its marketing over the past few months. The startup spent and won rights to official sponsorship of the recently concluded Indian Premier League (IPL) held in Middle East.

“Investors are betting Kunal (Shah) knows this industry better than anyone and can corner it quickly enough. They (Cred) can figure out a sizable revenue model as they go along,” said a second person aware of negotiations.

DST's global interest

Apoletto Asia, the personal investment vehicle of DST chief Milner, is already an investor in Cred from its seed funding round in late 2018.

After a quiet 2019 in India, DST Global is actively looking for deals. The firm 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.

Cred founder Shah sold Freecharge to Snapdeal for $400 million (Rs 2400 crore) in 2015.  In 2017, Axis Bank acquired Freecharge from Snapdeal for a paltry Rs 385 crore.

“They are keen to deploy more in India but size is an issue for them. They need 10-30 percent ownership generally and a minimum $500 million valuation. They are a proper late-stage investor but want to get in at that growth inflection stage,” said a person who has interacted with the firm, requesting anonymity.



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M. Sriram
first published: Dec 1, 2020 12:34 am
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