CRED raises $80 million, becomes the newest unicorn in market

Credit card repayment app CRED is set to become the newest unicorn in the market, with a valuation of over a billion dollars in the Indian start-up scene. DST Global and others have participated in its $80 million funding round including the existing investor’s Sequoia Capital, Tiger Global Management, Hillhouse Capital, and Ribbit Capital.

With this funding round, Freecharge co-founder Kunal Shah’s second venture is now valued at $800 million.

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Yuri Milner-led DST Global is also an investor in companies like Flipkart, Facebook, Spotify, Udaan, and Ola, among others.

Apoletto Asia—the personal investment vehicle of Milner of DST Global is already an investor in CRED from its seed-funding round in late 2018.

After a quiet 2019 in India, DST Global is actively looking for deals. The firm has invested in online education firm Byju’s and used car online marketplace Cars24, this year. BYJU’S, Cars24 and CRED all count Sequoia Capital as an investor.

CRED started as an invite-only app which exclusivity led to its initial success. The app is now open for all those who have credit scores of over 750. In India, a customer’s credit score, also known as CIBIL score, is calculated out of 900.

CRED is an app beneficial for customers with multiple credit cards. It tracks credit card due dates and alerts customers of their upcoming payment dates. One can clear their credit card dues on CRED using UPI and other payment options. Less than 60 million people in India have credit cards making the category lucrative for advertisers and businesses chasing consumer wallets.

CRED, by trying to get these people on its platform, offers a ready market for businesses to target these high-spenders.

In lieu, CRED offers customers points that can be redeemed on its platform itself with participating businesses. For example, one can part pay a holiday, electronic items, services, food, beverages and grooming products using Cred points.

CRED has been aggressive in its marketing over the past few months. The startup spent and won right to official sponsorship of the recently concluded Indian Premier League held in the Middle East.

“Investors are betting Kunal knows this industry better than anyone and can corner it quickly enough. They (CRED) can figure out a sizable revenue model as they go along,” said a second person aware of negotiations.