CRED Collects Serious Cash in Latest Funding Round, Boosting Valuation

By Thomas Price Wednesday, December 2, 2020

As financial infrastructure around the globe becomes more established and complex, the necessity for more tools in the hands of the consumers becomes larger. Especially in regard to credit cards, where many people have slowly amassed serious debt, learning to be responsible with one is a legitimate skill that must be learned. In particular, for people who have just recently begun using a credit card, this is doubly true. Two-year-old startup, CRED, aims to be a tool for people to learn financial responsibility with a credit card. Their success in doing so has led to major investments as well as astronomical valuations. So, how does CRED work, how has it grown, and what does its future look like given the money it has acquired?

Closeup of a stack of credit cards.

What Is CRED?

When broken down to the basics, CRED is a credit card bill payment platform for members who sign up. However, in order to become a member, a user must first be based in India, and second, have a credit score above 750. This caveat has in turn significantly boosted both the success of CRED’s system which works on incentives and rewards, but also its exclusivity for Indian people who have credit below 750. CRED’s system works on providing rewards for users once they reach certain milestones or refer other users. This is manifest in the form of CRED coins and CRED gems. So, for every rupee that is cleared when a user pays their credit card bill, they will earn a CRED coin, and for every person who that user has referred, who makes a credit card bill payment, that user will receive a CRED gem. As the user then slowly acquires coins and gems, they can then use them to purchase a variety of rewards and items from well-known brands that have partnered with CRED, including Samsung, Puma, and Ethos.

Other current features include bill payment reminders, automated bill payment, credit score monitoring, and, more recently, rent payment. All of these features, along with the impressive ecommerce store rewards and prizes have led to strong growth from CRED. While there are already over 3 million users, that number is likely to balloon even further after a series of well-placed ads during the IPL Cricket Tournament. These ads resulted in CRED’s increase of new daily signs, up nearly seven times more than average after the tournament concluded. The idea has been causing serious buzz with investors for some time now, and the startup’s most recent funding round and valuation are further proof of this fact.

CRED’s Major Funding and Valuation

In CRED’s Series C funding round, the startup reeled in an impressive $80 million. While not quite as high as the startup’s Series B funding round, which saw investments up to $120 million in 2019, this boost in capital has led to a significantly higher valuation from analysts. After the Series B funding, CRED had a staggering $450 million valuation; however, that number nearly doubled following the recent infusion of $80 million all the way up to $800 million. With clear growth and obvious capital to continue to build, CRED has achieved significant status considering how relatively young the startup actually is. This most recent funding round was led by and participated in by nearly identical investors to the Series B round, with all the firms essentially doubling down on initial investments. These firms include DST Global, Sequoia Capital, and Ribbit Capital. Neither the investment firms nor any CRED spokesperson released any statement on the most recent round of funding, but even without comment, it appears CRED is moving strongly in the right direction.

Final Conclusions

CRED has found a way to monetize financial literacy in a nation with a vast and growing population. By offering rewards and automated payments, CRED continually ensures that users pay the correct amount on time every month. By only allowing users with relatively high credit scores, the startup shields itself from taking on unnecessary risks. In the meantime, CRED has raised a lot of money that should keep the company focused on growth and building a user base instead of forcing revenues and profits. Given all of these factors, the $800 million valuation begins to make more sense.

About the Author

Headshot for author Thomas Price

Tom Price is a writer focusing on Entertainment and Sports Features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.

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