Indian fintech CRED seeks funds at a valuation of $ 5.5 billion – TechCrunch

CRED has begun engaging with investors to raise money at a valuation of $ 5.5 billion as the Indian fintech startup envisions international expansion and inorganic growth, a source familiar with the matter told me.

The startup has received a number of incoming requests from investors and has also held talks with some in recent days to raise capital at a pre-money valuation of $ 5.5 billion, the source said, just weeks after the startup. in progress three years out. finalizing an investment of more than $ 200 million with a pre-money valuation of approximately $ 3.75 billion from Tiger Global and Falcon Edge Capital, among others, according to several people familiar with the matter.

The Bangalore-based startup disputed the claims.

In his conversations with investors, CRED founder and CEO Kunal Shah has said he plans to deploy the capital to invest in and acquire fintech startups, people familiar with the matter said.

The startup has already engaged with several companies. He recently invested in CredAvenue, which recently revealed $ 90 million in funding for the country’s largest Series A, and is in talks to back fintech startup Uni with a valuation of more than $ 300 million, according to two people familiar with the matter. .

CRED, which helps people improve their credit scores by paying bills on time and has amassed more than 7.5 million members, this year has also explored the aggressive expansion of its e-commerce platform.

In its app, the startup offers its members access to a range of premium brands. Earlier this year, CRED explored whether it should acquire some of the brands they sell on CRED.

The startup, unlike most others in India, does not focus on the usual TAM of India (hundreds of millions of users from the second most populous nation in the world) and instead caters to some of the most populous audiences. premium.

“India has 57 million credit cards (versus 830 million debit cards) [that] It mainly serves the high-end market. The credit card industry is largely concentrated with the top 4 banks (HDFC, SBI, ICICI, and Axis) controlling around 70% of the total market. This space is extremely profitable for these banks, as can be seen from the SBI Cards IPO, ”Bank of America analysts wrote in a previous report.

“Very few startups like CRED are focusing on this high-level foundation and [have] adopted a platform-based approach (acquire customers now and seek monetization later). The credit card in India is still an aspirational product. Insufficient penetration would likely ensure continued strong growth for years to come. Over time, the form factor can evolve (ie go from a plastic card to a virtual card), but the inherent demand for credit is expected to grow, ”they added.

CRED has also expressed its intentions to expand outside of India to potential investors. In one of the conversations with one of them, Shah said that he has identified an international market where CRED is exploring to launch its offering, said another person familiar with the matter. TechCrunch was unable to determine the name of the market.

CRED, backed by Tiger Global, Ribbit Capital and Sequoia Capital India and valued at $ 2.2 billion in an April round and $ 806 million in a round it revealed in January, has aggressively expanded into new categories in recent quarters. The startup lends to its members, giving them the option to pay the rent and the tutoring fee from the app itself. In August, it launched Mint, a service through which it allows its members to lend to each other at an interest rate of up to 9% per year.

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