Cred, the youngest startup in the Indian ecosystem, has raised $215 million to surge its market cap to $2.2 billion. The startup is Bangalore-based. In the series D funding round on Tuesday, the firm was supported by both new investors and existing investors. Cred revealed this information to the media portals. In January, the company raised $81 million in the Series C funding round to make its valuation approximately $800 million.
About the Financial Details of Cred
Founded in 2019, Cred has attracted many investors to raise funding for its operations. In a recent round of $215 million, new investor Falcon Edge Capital and existing investor Coatue Management led the new cycle. Insight Partners and existing investors DST Global, RTP Global, Tiger Global, Greenoaks Capital, Dragoneer Investment Group, and Sofina also participated to surge its valuation to $2.2 billion. Cred has raised a total of $443 million in different funding rounds.
It was TechCrunch who first reported that Cred is in talks with different investors to raise $200 million and above.
Cred operations are based on an app that rewards Credit cardholders when they pay different bills through its platform. Cred offers different services to its customers including special e-commerce deals.
If a person wants to register on the Cred platform, he/she should have a minimum of 750 credit score. It helps Cred to have a database of premium credit cardholders.
As per the latest report, the startup has a user base of above 6 million users that is 22% of the total credit cardholders in India. These 6 million users are 35% of all premium credit cardholders. India has the second-largest credit card market in the world.
Kunal Shah, founder, and CEO of Cred told TechCrunch that the firm plans to add additional functionality other than financial operations. One of such operations is the e-commerce offerings of Cred.
Cred is becoming a popular place for e-commerce activities. Customers are liking Cred e-commerce offers and in return, the Cred platform is getting positive word of mouth.
Talking about the latest funding, Kunal said that the company wants to do more experimentation to increase its revenue.
Cred is Focusing on Premium Customers
Kunal has no ambitions to allow credit cardholders that have less than 750 credit scores. He said that those customers should improve their credit scores. The firm will not lower its criteria. The company wants to serve premium users.
When other startups are trying to woo more users, Cred has set the criteria to entertain limited users. It makes Cred a unique platform.
Bank of America Analysts gave talked about the credit card market in India. The report said:
“India has 57 million credit cards (compared to 830 million debit cards) [that] largely serves the high-end market. The credit card industry is highly concentrated, with the top 4 banks (HDFC, SBI, ICICI and Axis) controlling around 70% of the total market. This space is extremely profitable for these banks – as evidenced by the IPO of SBI Cards.”
Talking about Cred criteria to select premium users, Analysts further added:
“Very few start-ups like CRED focus on this high-end base and [have] took a platform-based approach (acquire customers now and seek monetization later). The credit card in India remains an ambitious product. Under penetration would likely ensure continued strong growth in the years to come. Over time, the form factor may change (ie move from plastic card to virtual card), but the inherent demand for credit is expected to increase.”
Cred has become one of the most talked-about startups in India due to its unique functionalities. Some customers are even saying that Cred has lowered the reward value for its customers. Earlier, it used to offer more things to the users.
Talking about this issue, Shah said:
“What will happen soon is that customers will realize that these points are an asset and not a liability. They will start to see the benefits of points in more places.”
He also said that the pandemic has detailed few new offerings of Cred. It will offer those features soon to its customers.