Indian fintech CRED announced on Tuesday that it had raised $ 251 million in a new funding round, its third funding this year, for a valuation of $ 4.01 billion.
Existing investors Tiger Global and Falcon Edge Capital have co-led the Bangalore-based startup’s Series E funding round for three years. Marshall Wace and Steadfast also participated, as did existing investors DST Global, Insight Partners, Coatue, Sofina, RTP and Dragoneer. The startup was valued at $ 2.2 billion in an April cycle this year and $ 806 million in a leaked cycle in January.
TechCrunch reported last week that CRED recently completed a funding round at a pre-currency valuation of $ 3.75 billion. The outlet also said the startup has had preliminary talks about a new round, which could value it at around $ 5.5 billion. A CRED spokesperson said at the time that everything in the story was incorrect. ($ 3.75 billion valuation before the money + $ 251 million new increase = $ 4.01 billion valuation after the money.)
CRED helps and rewards people to improve their credit scores by encouraging them to pay their credit card bills on time. The startup has gathered more than 7.5 million members. (India has around 25 million unique credit card users.)
On its application, the startup offers its members access to a panel of premium brands. The startup, unlike most others in India, doesn’t focus on India’s usual TAM – hundreds of millions of users from the world’s second most populous country – and instead targets some of the audiences. the most prestigious.
âIndia has 57 million credit cards (compared to 830 million debit cards) [that] largely serves the high-end market. The credit card industry is largely 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, âBank of America analysts wrote in a previous report.
âVery 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. Underpenetration would likely ensure continued strong growth in the years to come. Over time, the form factor may change (ie go from a plastic card to a virtual card), but the inherent demand for credit is expected to increase, âthey added.
The startup has not disclosed what it plans to do with the new investment. But in recent weeks, TechCrunch reported, CRED has had talks to invest in other fintech startups.
CRED recently invested $ 5 million in CredAvenue, which recently unveiled $ 90 million in Series A funding, and is in talks to back fintech startup Uni at a valuation of over $ 300 million, reported TechCrunch.