Indian Startup CRED raises $81 million, buys back shares worth $1.2 million from employees

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Bangalore-based CRED STARTED 2021, the new year on a high note.

The two-year-old startup, led by high-profile entrepreneur Kunal Shah said on Monday it has raised $81 million in a new financing round and bought shares worth $1.2 million (about 90 million Indian rupees) from employees.

Cred — which operates an eponymous app to reward customers for paying their credit card bills on time and offers deals from interesting online brands — a post-money valuation of $806 million.

In 2 months CRED has nearly doubled its customer base to about 5.9 million, or about 20 percent of the credit card holder base in India. The startup said that the median credit score of its customer was about 830, and about 30 percent of its customer base today holds a premium credit card. (On a side note, more than 50 percent of CRED customers pay their bills using UPI.)

CRED has grabbed quite a lot of attention in India and has been in talks for a while now, in part because of the scale at which its valuation has soared and the amount of capital it has been able to raise in such a short period.

One of the biggest questions surrounding CRED today is just how it makes money, given how most fintech startups in the country today. Direct-to-consumer market in India is still in its nascent stage, though some estimates say it could be worth $100 billion by 2025.