Cred, a credit card bill payments platform, is set to make a way in the wallet payments business by acquiring alcohol delivery startup HipBar Pvt. Ltd, which owns a prepaid payment instrument (PPI) licence, three people aware of the development said. The PPI licence, granted by the Reserve Bank of India (RBI), permits companies to operate payments systems such as digital wallets, prepaid transit cards, vouchers, etc. The RBI website lists 37 entities that hold this licence as of this month. HipBar was granted the licence in August 2016.
As per the filings with the Registrar of Companies, Cred founder Kunal Shah and his brother Rohan Shah Naresh joined HipBar as directors on 12 October. Only one of the erstwhile HipBar founders—Prasanna Natarajan—is still a director.
However, one of the three people cited above stated Cred acquired the payments business of HipBar. Consequently, about 10-15 people from HipBar will join Cred, the person said, requesting anonymity.
“While there is no regulatory approval required for acquiring a PPI, the regulator has been informed of the change in control, and the process has been set in motion,” the person responded. How RBI sees the acquisition of companies with a PPI licence and whether the transfer of licence to the acquirer is considered automatic is unclear.
HipBar’s app lets consumers buy a variety of alcoholic beverages and pay using its wallet. In 2018, United Spirits Ltd, part of global spirits major Diageo, financed ₹27 crores in the startup for a 26% stake. However, in July, USL traded its entire stake in HipBar at a 98% loss back to Natarajan for ₹52 lakh.
About HipBar
HipBar is India’s first drinks app. Established by industry insiders with a vision to help India drink wiser, HipBar’s story started in 2015 and now unites brands, retailers, and consumers like never before. The HipBar app strives to create a responsible digital ecosystem for the world’s favourite vice by running a smart, age-verified distribution model with compliance and responsibility at its core.
Cred Valuation
CRED is a members-only credit card bill payment platform that rewards its members for making their credit card bills on time. Cred is the youngest Indian startup to reach the $2 Billion valuation mark earlier this April.
With over 1300 brand associates, CRED claims to have a customer base of 7.5 million and 20% share of all credit card bill payments in India. Freshly, CRED had calculated a 208X growth in its operating revenues to Rs 108 crore during the fiscal year closing March 2021.
As per the projections, yearly losses are slated to be approximately Rs 562 crore in FY21, increasing by 55% as balanced to Rs 363.2 crore in FY20. These numbers are not from the audited statements as CRED is yet to file them for FY21.
