CRED in talks with investors to raise $200 mn fund, to hit $2 bn valuation: Reports

As per news report, Bengaluru based fintech startup CRED is in discussion with existing investors for a fresh funding at a post-money valuation of $2Bn. A couple of months back the company has raised $81 Mn in its Series C round.

If the news report is to be believed then the $200 Mn transaction is expected to close within a month. In its last round of funding it had received fund from Ribbit Capital, Sequoia Capital and Tiger Global. That round also saw participation from undisclosed partners from DST Global. These investors are expected to participate in the new round as well, according to news source.

Founded in 2018, CRED focuses entirely on premium credit card users, offering them rewards and benefits for paying credit card bills. Members are only allowed once their credit score has been screened. Such data could likely be used by CRED to back its lending play, while in recent months, the company has also focussed sharply on its ecommerce business.

CRED has added over 5.9 Mn credit card users with a median credit score of 830 in last two years.

As for its ecommerce platform that allows for discovery of D2C brands as well as experiential services such as hospitality and travel, CRED has added over 1,300 brands such as Samsung, Myntra, and Curefit among others. Apart from this, it also launched CRED as a check out option for Razorpay merchants, where users can utilize CRED coins to pay for a part of the order value.

CRED’s valuation has been growing steadily over multiple rounds, despite having negligible revenue over the same time period. Before closing its Series C with an $800Mn valuation tag in December, CRED’s valuation stood at around $450 Mn valuation after its $120 Mn Series B round in August 2019.

For the financial year ended March 2020 (FY20), CRED posted operating revenue of just INR 52 lakh in the fiscal year ended March 31, 2020. In the same financial year, CRED made more revenue from interest on fixed deposits and current investments than actual revenue from operations.