CRED stands at $2.2 billion after raising $215 million in Series D funding

CRED stands at $2.2 billion after raising $215 million in Series D funding

The Bangalore-based start-up CRED has raised $215 million in the Series D funding, increasing the value of the start-up to $2.2 billion. The valuation is up from $800 million in the Series C round of $81 million in January.

Multiple investors such as Falcon Edge Capital and Coatue management have led the Series D funding. The Series D funding was participated by various investors such as Insight Partners and existing investors DST Global, RTP Global, Tiger Global, Greenoaks Capital, Dragoneer Investment Group, and Sofina bringing the total to-date raise of about $443 million.

The system on which CRED works is a rewards-based system that pays the consumers the rewards of paying the credit card bills on time and also provide additional services and products from multiple brands. For using CRED, the individual needs to have a credit score of 750 for signing up, helping people to improve the financial behavior. In India, CRED has a user base of 6 million customers which are almost 22% of all credit card holders and 35% of all the premium cardholders.

Kunal Shah, founder of CRED in an interview with a foreign media told that start-up intends to become the platform for affluent customers in India and also not limit its offerings to financial services the start-up's aforementioned e-commerce service, for instance, has been growing fast. He attributed the early success to customers enjoying the curation of items on CRED and merchants finding the platform appealing is the ticket size of each transaction on CRED tends to be higher. The startup plans to deploy the fresh funds to scale several of its revenue channels and engage in more experiments.

Analyst at the Bank of America reports that "India has 57 million credit cards (vs 830 million debit cards) [that] largely serve the high-end market. The credit card industry is largely concentrated with the top 4 banks (HDFC, SBI, ICICI, and Axis) controlling about 70% of the total market. This space is extremely profitable for these banks – as evident from the SBI Cards IPO. Very few start-ups like CRED are focusing on this high-end base and [have] taken a platform-based approach (acquire customers now and look for monetization later). A credit card in India remains an aspirational product. The under penetration would likely ensure continued strong growth in the coming years. Over time, the form-factor may evolve (i.e. move from plastic card to virtual card), but the inherent demand for credit is expected to grow,"