Indian fintech CRED valued at $4 billion following $251 million fundraise – TechCrunch

CRED, an Indian fintech company, announced Tuesday that it had raised $251 million in a third round of financing. This was at a valuation $4.01 billion.
The three-year-old Series E financing round for startups based in Bangalore was led by existing investors Tiger Global, Falcon Edge Capital and Steadfast. Steadfast and Marshall Wace also participated, as did existing investors DST Global and Insight Partners, Coatue and Sofina. In April, the startup was valued at $2.2Billion and in January it disclosed a round of $806M.

TechCrunch reported last Wednesday that CRED has closed a financing round at a premoney valuation of $3.75 trillion. According to TechCrunch, the startup had also been reported as having held preliminary discussions about a new round that could be valued at around $5.5 billion. CRED spokesperson stated that the entire story was incorrect. ($3.75 billion valuation pre-money + $251 million raise = 4.01 billion post-money value.)

CRED rewards and helps people improve credit scores by encouraging them to pay on time their credit cards bills. Over 7.5 million people have joined the startup. (India is home to approximately 25 million credit card users.

The startup's app gives its members access to premium brands. The startup is different from most startups in India. It doesn't cater to the TAM of India hundreds, millions of users, but instead caters for some of the most elite audiences.

India has 57 Million credit cards compared to 830 Million debit cards. This largely serves the high end market. Credit card industry is highly concentrated, with the four largest banks (HDFC SBI, ICICI, ICICI, and Axis) holding about 70% of total market. These banks are extremely profitable as evidenced by the SBI Cards IPO, Bank of America analysts wrote in an earlier Report.

CRED is one of the few start-ups that aren't focusing on high-end customers. Instead, they have adopted a platform-based approach (acquire clients now and then look for monetization later). India's credit card market is still a dream product. In the coming years, strong growth would likely be assured by under penetration. The form-factor will likely change over time (i.e. They said that although the demand for credit will grow over time, it may change from plastic to virtual cards.

The startup did not disclose its plans for the new investment. TechCrunch reported that CRED had held discussions to invest in other fintech startups in recent weeks.

CRED invested $5 million in CredAvenue recently, which unveiled a $90million Series A funding. TechCrunch reported that CRED is now in discussions to invest in Uni, a fintech startup valued at over $300 million.