Exclusive: Kunal Shah’s CRED in talks to acquire Dineout, Wint Wealth

Kunal Shah-led fintech platform CRED is in talks to acquire two startups - Dineout and Wint Wealth, as it seeks to offer more services to its over 7.5 million users, people familiar with the development told Moneycontrol.

While Times Internet-owned Dineout helps users discover restaurants, offers discounts and complimentary dishes with Dineout Passport, Wint Wealth is an alternate investment platform which offers users better stable returns than a Fixed Deposit but less than the stock market.

Wint’s investors include Zerodha's Rainmatter Capital fund, CRED's Shah, Better Capital and Raise Financial's Pravin Jadhav as investors. The Dineout deal is pegged at a valuation of $25-50 million, while Wint Wealth could be acquired for about $50 million

To be sure, these talks are at an early stage and a deal is not certain, although the discussions do signify both CRED’s ambitions and its financial ammunition. When contacted, Dineout co-founder and CEO Ankit Mehrotra denied the development and said there is no such conversation taking place. Wint Wealth founder and CEO Ajinkya Kulkarni too categorically denied any talks of a sale. A CRED spokesperson declined to comment on what they termed speculation

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CRED's talks to acquire these startups comes weeks after it raised $251 million, doubling its valuation to $4 billion in barely six months. It started out in 2018 as a credit-card payment platform rewarding users with points for paying their bills but has since added products such as rent payments and personal loans, as it seeks to become a full-fledged financial services provider.

The Economic Times reported that Kunal Shah had acquired a non-banking finance company Parfait Finance & Investment, through an entity called Newtap Technologies and has received RBI's nod for the acquisition. It recently also acquired Chennai-based liquor purchase and delivery startup HipBar to foray into the wallets space, as HipBar has a prepaid payment instrument license. Its ambitions extend in multiple directions

"CRED is looking to make a series of acquisitions to become a full-fledged financial services provider, with ambitions of eventually becoming a bank," a person aware of the matter said.

“Today CRED also wants to leverage its brand to the hilt, which is why these direct-to-consumer (D2c) acquisitions like HipBar and Dineout make sense. The brand recall can be strong enough for it to even become a payment tool at bars or restaurants,” a second person said, requesting anonymity

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Shah, one of India’s best-known new-age entrepreneurs and a prolific angel investor is also ramping up its monetisation efforts. It recently launched Mint, a peer-to-peer lending product where CRED users can lend money at a 9 percent interest rate to other users. CRED's members make up for 35 percent of premium credit cardholders in India and it processes a quarter of credit card bill payments in the country.

Dineout was founded by Ankit Mehrotra, Nikhil Bakshi, Sahil Jain and Vivek Kapoor in 2012 and was acquired by Times Internet Limited in 2014 for $10 million. Miten Sampat, former Chief Strategy Officer of Times Internet who joined CRED last year, served on the board of Dineout until recently. The startup has a business-to-consumer (B2C) offering- where it connects diners to restaurant discounts & deals, and a business-to-business (B2B) offering, where it helps restaurants with technology and analytics that can help them personalise menus based on user preferences.

While CRED has been strengthening its commerce play by onboarding multiple D2C brands on its platform, dining out can be an additional area where its users can transact on the app, by using CRED's wallet or UPI modes of payment.

At the same time, Wint Wealth offers retail investors debt instruments traded on the BSE, that offer returns of 9-11 percent, higher than Fixed Deposits. This can potentially open up another investment avenue for CRED's users.

CRED’s acquisition spree also underlies the current record funding boom, where internet companies across sectors, flush with cash and acquiring companies of all sizes, sometimes even bigger than them, to expand into calibrated newer areas, go deeper in an area or make a moonshot bet. Many startups are seeing acquisitions as the cornerstone of their strategy in an era of cheaper capital which makes cash deals easier and stock deals reasonable because the company raises funds at aggressive valuations.