In what should be seen as a positive development in the Indian startup scene, fintech startup Cred has managed to raise funds in its Series B funding. The interesting part is the company wanted $100 million but ended up collecting $120 million. Cred has been valued at $450 million. The current valuation must be treated as a huge increase from the mere $75 million it was valued at when the startup raised funds last time. That was just a year ago.
The investors to have participated in this round of investment in Cred include existing investors Ribbit Capital, Gemini Investments, and Sequoia Capital. Israeli-Russian investor Yuri Milner's DST Global had also participated through a personal investment arm. In addition, Tiger Global, Hillhouse Capital, General Catalyst, Greenoaks Capital and Dragoneer have joined in as new investors.
Cred, is a startup founded by Kunal Shah of Freecharge fame. The business model Cred follows, is customers can settle their credit card outstanding via the Cred app and in turn earn several direct and indirect benefits. These include gift coupons and discount vouchers which can be redeemed at retail outlets. This is a pan-India operation.
Kunal Shah wants to take this business model overseas and the fresh investments would be used for this purpose as well. Besides, Cred wants banks to come on board its platform and offer loans to its customers. Some discussions with banks have already been going on, according to the founder.
According to RBI, there are around 50 million credit card holders in the country. Around half this number are active and frequent users of the cards. Cred is trying to appeal to this lot to hop on to its platform and enjoy the benefits. The startup may start issuing its own co-branded credit cards going forward.