Led by Singapore’s sovereign wealth fund GIC, credit card payment platform Cred has raised USD 80 million as part of a series F funding round. The funding also saw participation from existing investors, according to the company’s filing with the Ministry of Corporate Affairs (MCA).
The company, led by Kunal Shah, has successfully raised the money at a valuation of USD 6.22 billion. The valuation has been calculated on the last closing price of the rupee against the dollar.
Sofina Ventures, Tiger Global, DF International and Alpha Wave Ventures, existing investors in the company, also participated in the funding round. The filing by the company with the regulatory authority showed that the company may raise more funds as part of the series F funding round.
Earlier this year, it was reported that the company planned to raise USD 300 million at a valuation of over USD 6 billion. A crossover fund from the Middle East, along with existing investors Alpha Wave Ventures and Tiger Global Management were expected to lead the funding round.
According to a statement from the company, Cred was raising its series F investment, which would value the company at USD 6.4 billion. The company also said that it aims to raise USD 140 million in the round led by GIC, which would also see participation from existing investors including Tiger Global, Sofina, Dragoneer and FalconEdge. In the statement, the company also announced that the round would have a secondary component while declining to provide further details.
Cred has allotted 42,308 series F compulsory convertible preference shares (CCPS) at a face value of INR 100 per share, at a premium of INR 1,47,746 for consideration of USD 79.25 million in cash.
According to the regulatory filings by the company, it would use the funds to expand its business and to fund future growth plans. This would include long-term and short-term funding requirements and corporate purposes.
Cred has diversified since its launch
Cred was founded in 2018 by Kunal Shah, a serial entrepreneur, to cater to the country’s credit-worthy individuals and assist them in paying credit card bills in exchange for points. Since its launch, the company has diversified into lending, e-commerce, brand advertising, and short-term credit via BNPL (Buy Now, Pay Later) options.
In the span of under two years, the company has loaned almost INR 2,000 crores, with probable low defaults due to the high creditworthiness of its clients. The payments business of the company, Cred Pay, is reported to process transactions worth almost USD 500 million per year.
Cred aspires to be like US company Affirm, which offers customers a BNPL facility for online transactions. Affirm was listed at a market cap of USD 24 billion. Last year, when Cred raised USD 251 million from its existing investors, the company was valued at USD 4 billion.
Kunal Shah, who is popularly known as an angel investor and new-age entrepreneur, has reinforced the company’s foray into e-commerce by onboarding multiple online-only brands on its platform. It recently launched a zero-commission onboarding platform, while waiving listing fees and commissions from sales of all brand partners.
In March this year, it was reported that Cred’s losses had widened for the year ending March 31, 2021, to INR 540 crore, up from INR 360 crore a year ago for the corresponding period. The company’s revenue dramatically increased by over 5 times to INR 18.16 crore.
The successful series F funding round came at a time when overall funding for Indian startups had witnessed a slowdown. This followed a correction in valuations of tech startups globally. Large venture capital firms like Tiger Global and SoftBank have also reduced their funding for high-growth startups.
