Serial entrepreneur Kunal Shah’s fintech startup,CRED, on Tuesday said it has closed $215 million as part of its Series D funding round, at a post-money valuation of $2.2 billion, making it the latest entrant to India’s unicorn league.
The latest round of funding which was led by new investor Falcon Edge Capital and existing investor Coatue Management LLP, comes after the startup raised $81 million, as a part of its Series C round, which ascribed it a valuation of $806 million, in January, this year.
New investor Insight Partners also participated as part of this round along with existing investors DST Global, RTP Global, Tiger Global, Greenoaks Capital, Dragoneer Investment Group, and Sofina are also investing in this round.
With this round, the company has raised close to $300 million in investments, in 2021 alone.
Founder of CRED Kunal Shah confirmed the development and told Mint that almost 70% of the current round was subscribed by existing investors. He also added that the investments will be used to scale its existing line of products, which it launched last year.
While announcing the fundraise to employees, in an internal memo on Tuesday, Shah added that the company will also be initiating an ESOP buyback of $5 million for employees.
Mint reviewed a copy of the memo sent to employees on Tuesday afternoon.
“While most of you were keen on retaining your stock options during the Series C, we are committed to a culture of creating wealth for stakeholders and are therefore offering another ESOP buyback opportunity to you. Eligible team members can now sell a portion of your vested shares. The cumulative buyback will be upto $5 million. as the funding helps CRED invest in its future, hopefully the buyback will help some of you do that too,” said Shah in an internal memo.
Two-and-half year old, CRED started with the concept of allowing users to easily pay their credit card bills while also earning additional rewards. Since then, it has expanded its services to lending through its credit line CRED Cash, and online commerce and brand discovery through its Discover and WIN platform. It has also added new used cases including rent payments through ‘CRED RentPay’ on its platform.
“While valuation is a milestone that many celebrate, we view it as a responsibility and an opportunity to create member value. We’ve grown rapidly over the past 2.5 years, with 35% of premium credit card holders and processing 22% of all credit card payments in India on a monthly basis. As the credit card category continues to grow rapidly in India, our opportunity is to imagine new use-cases, empower CRED members to use credit responsibly, and reward them for good financial behaviour,” said the internal memo sent by Shah.
The company has also introduced new services such as CRED Pay to help with easy checkouts on its in-app commerce platform.
According to Shah, CRED’s existing lines of business have been steadily growing and pose significant revenue opportunities for the company.
The Bengaluru-based startup saw its total losses widen to ₹360.31 crore in the financial year ended March 2020, as compared to ₹60.87 crore a year ago.
This article was first published on livemint.com
