Barely nine months old, Bangalore fintech firm CRED has just won a $120 million Series B funding round that launches it to the forefront of India’s booming digital credit industry—and its founder to Indian tech royalty.
Thirty-five-year-old Kunal Shah founded CRED last December, having sold his second company, recharge platform FreeCharge, to Snapdeal for $400m. The value of his latest startup, which aims to reward fiscally responsible users, has now surpassed that at around $450m.
This week’s round, which brings CRED’s total VC investment to $145m, was led by existing funders Sequoia Capital, Gemini Investments and Ribbit Capital. It allows CRED to scale quickly, and reach the hundreds of millions of Indians who have never owned a credit card (around 25m, or 2%, of the nation’s citizens are thought to have one).
CRED works by offering incentives and deals to customers who make credit card payments in a timely fashion. It also reminds users of bills and other payments—a worthy feature in a country where, according to Standard & Poor’s, 76% of the population does not understand “basic” financial concepts.
Shah, an outspoken college dropout, is focusing on India’s minority of credit card holders. But his company’s latest cash injection will allow it to offer more to existing customers, and scale outside the country. That will help it bring more Indians onboard, in a domestic market that is growing at a phenomenal pace: Indian fintech is growing at a CAGR of 22%, towards a $31bn valuation in 2020, the Economic Times has reported.