Indian fintech CRED seeks funds at valuation of $ 5.5 billion – TechCrunch
CRED has started engaging with investors to raise funds at a valuation of $ 5.5 billion as the Indian fintech startup considers international expansion and inorganic growth, a source close to the case.
The startup has received a number of incoming inquiries from investors and has also had talks with some in recent days to raise capital at a pre-monetary valuation of $ 5.5 billion, the source said, just weeks away. after the three-year startup was finalized. an investment of more than $ 200 million at a pre-monetary valuation of around $ 3.75 billion from Tiger Global and Falcon Edge Capital, among others, according to several people familiar with the matter.
Deliberations for the new round table are still in their infancy and conditions could change, the source said.
The Bangalore-based startup disputed the claims.
In conversations with investors, CRED founder and chief executive Kunal Shah said he plans to deploy the capital to invest in – and acquire – fintech startups, people familiar with the matter said.
The startup has already engaged with several companies. He recently invested in CredAvenue, which recently unveiled $ 90 million funding in the nation’s largest Series A fundraiser, and is in talks to back fintech startup Uni at a valuation of over $ 300 million, according to two people familiar with the matter.
CRED, which helps people improve their credit scores by paying their bills on time and has amassed over 7.5 million members, also explored aggressive expansion of its e-commerce platform this year.
On its application, the startup offers its members access to a panel of premium brands. Earlier this year, CRED considered whether it should acquire some of the brands that sell on CRED.
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.
“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, ”Bank of America analysts wrote in a previous report.
“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. 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, ”they added.
CRED has also expressed its intention to expand outside India to potential investors. In one of the conversations with one of them, Shah said he identified an international market in which CRED is exploring to launch its offer, said another person familiar with the matter. TechCrunch was unable to determine the name of the market.
CRED – backed by Tiger Global, Ribbit Capital and Sequoia Capital India and valued at $ 2.2 billion in an April cycle and $ 806 million in a cycle disclosed in January – has expanded aggressively to new categories in recent quarters. The startup lends to its members, giving them the ability to pay their rent and tuition from the app itself. In August, it launched Mint, a service whereby it allows its members to lend to each other at an interest rate of up to 9% per annum.