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Cred Has Been Valued At $4 Billion Following a $251 Million Funding Round

CRED, an Indian fintech firm, is valued at $4.01 billion after securing $251 million in a fresh round of funding.

Cred Has Been Valued At $4 Billion Following A $251 Million Funding Round

CRED, an Indian fintech firm, is valued at $4.01 billion after it announced on Tuesday that it has secured $251 million in a fresh investment round, its third this year.

The three-year-old Bangalore-based start-up’s Series E fundraising round was co-led by existing investors Tiger Global and Falcon Edge Capital. Current investors DST Global, Insight Partners, Coatue, Sofina, RTP, and Dragoneer all invested, along with   Marshall Wace and Steadfast. In April this year, the firm was valued at $2.2 billion, and in a January, it was valued at $806 million.

CRED encourages consumers to clear their credit card payments on time and helps them enhance their credit score. Over 7.5 million users have signed up with the start-up. (There are around 25 million unique credit card holders in India.)

The start-up provides its users with access to a variety of luxury brands through its app. Unlike most others in India, the business caters to some of the most affluent customers rather than the typical TAM of India – hundreds of millions of people in the world’s second-most populous country.

“India has 57 million credit cards (compared to 830 million debit cards) [serving] mostly the elevated market. The credit card business is highly consolidated, with the top four banks (HDFC, SBI, ICICI, and Axis) accounting for around 70% of total market share. According to Bank of America analysts, “this market is very profitable for these banks — as seen by the SBI Cards IPO.”Bank of America Analysts wrote in an earlier report “Only a few start-ups, such as CRED, are focused on this high return market and [have] adopted a platform-based strategy” (acquire enrol customers now and look for making money later). In India, a credit card is still a luxury item. In the next few years, the under penetration will almost certainly assure sustained significant development. The form factor may change over time (for example, moving from a physical card to a virtual card), but the intrinsic need for credit is projected to grow,” they noted.

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