Kunal Shah\'s Cred in talks to raise another $75-100M

Kunal Shah's Cred in talks to raise another $75-100 million in new funds

The expected funding may value Cred at $300-400 million, which will be a huge jump from its previous round's valuation of $75 million. Pratik Bhakta&Samidha Sharma  |  ETtech  |  Updated: March 19, 2019, 22:55 IST
Kunal Shah's Cred in talks to raise another $75-100 million in new funds Kunal Shah-founded Cred, which has emerged as one of the buzziest fintech startups in the country of late, is in the market to raise $75-100 million, according to two people familiar with the talks.

The financing round is likely to be led by existing investors, including Sequoia Capital and Ribbit Capital, they told ET, adding that if Cred manages to secure the funds, it is expected to value the five-month-old company at $300-400 million, up from $75 million last year.

The company's other backers include RPT Global (formerly RuNet), China’s Morningside Venture Capital, Russian tech billionaire Yuri Milner’s personal investment vehicle Apoletto, and a clutch of individual investors. Shah did not respond to ET’s request for comment on the matter.

Also read: Kunal Shah on why he started Cred, role of discounts, startup founder mistakes & more

A source close to the deal discussions said, “The company has commitments from its existing set of investors but is keen to bring a new backer on board. Those talks are still underway but some clarity may emerge by the end of the month.”

Industry executives aware of the Cred’s fund-raising plans said the company could be looking at fresh capital mainly to create entry barriers for other entrepreneurs to target this space. “Cred could become so well-funded and strongly backed that any other company trying to disrupt the credit card market may find it difficult to on-board investors,” the person cited earlier said.

Shah, who had earlier founded mobile wallet recharge firm FreeCharge, is targeting the top 25 million Indians who may have high creditworthiness.

Also read: Kunal Shah's Cred may go live on UPI in a month

In an earlier chat with ET, Shah had said that Cred will look to enter the insurance domain, with the aim of reducing the cost of car or health insurance, which are often prohibitively high in India, and introduce lending to its users.

He had said in November last year that while these were strong monetisation models, for now building for scale would be priority. The firm will source consumers through credit card bill payments and rewards, then use the base to develop high-end loyalty and concierge and other such services.