Kunal Shah’s credit card bill payment platform Cred is the latest startup to join the unicorn club with a $215 million Series D round funding. The valuation with the latest round for less than three-year-old startup has jumped 2.73X to $2.2 billion from $806 million in its $81 million Series C round in January this year. The information on fundraising was shared by Shah on Twitter today and with employees in a note. The latest investment was led by new investor Falcon Edge Capital and existing investor Coatue Management while another new investor Insight Partners and existing ones including RTP Global, DST Global, Greenoaks Capital, Tiger Global, Sofina, and Dragoneer Investment Group joined the round.
“Our growth in the past year has demonstrated the potential value of the high-trust, low-friction platform the CRED team has been building and has earned conviction of investors. CRED has closed its Series D funding round of $215 at $2.2B valuation,” Shah tweeted. The company has grown rapidly over the past 2.5 years, with 35 per cent of premium credit card holders and processing 22 per cent of all credit card payments in India on a monthly basis, he told employees. The company also announced the development separately in its newsletter. According to Crunchbase, the company had raised $256.5 million so far. The latest round brings the total fundraise to $471.5 million.
Along with the new investment, Cred also announced that it will offer employees another ESOP buyback opportunity with a cumulative value of $5 million. “We are committed to a culture of creating wealth for stakeholders and are therefore offering another ESOP buyback opportunity to you,” Shah said. The company had completed its first ESOP buyback programme in January this year from existing and former employees. The buyback was initiated during the Series C round that saw the participation of Sequoia Capital, Ribbit Capital, Tiger Global, General Catalyst, Sofina, Coatue, and Satyan Gajwani of Times Internet. According to the company, the employees had liquidated their ESOPs collectively worth Rs 9 crore.
Cred had reported Rs 18 crore in annual income in FY20 up from Rs 3 crore in FY19 even as its losses grew to Rs 360 crore from Rs 60.86 crore, according to the regulatory filing sourced from Tofler. India’s credit card user base had reached 47 million in 2019 and is likely to grow at a CAGR of over 25 per cent during the 2020-2025 period on the back of the rising popularity of credit cards and the growing trend of purchasing products first and paying later, according to TechSci Research. While the market is smaller in comparison to the debit card, however, it is expected to see a significant rise in the coming years.