Cred founder Kunal Shah is looking to raise the funds at a valuation of $300 million, unprecedented for the four month-old startup
There is immense in-bound interest to invest in Cred even though the company recently raised money and is only four months old
Mumbai: FreeCharge co-founder Kunal Shah’s second venture, Cred, that incentivizes credit card payments with reward points, is in talks to raise $100 million in its next funding round, with massive inbound interest for second time founders who have a proven track record, said two people aware of the development.
Shah is looking to raise the funds at a valuation of $300 million, unprecedented for the four month-old startup, said one of the people cited above. Mint was not able to immediately ascertain the names of potential new investors.
Dreamplug Technologies Pvt. Ltd, which runs Cred, had previously raised about $25 million in June. “There is immense in-bound interest to invest in Cred even though the company recently raised money and is only four months old," said one of the people cited above, requesting anonymity.
Sequoia Capital, RPT Global, China’s Morningside Ventures and the personal office of Russian billionaire Yuri Milner were among those who invested in Cred’s seed fund raise last year.
Individuals with high credit scores can make credit card payments on Cred’s platform.
Timely payments will fetch rewards and offers and discounts for shopping, health services and other sites. The app will also discover hidden charges in credit cards and point them out to customers. Cred has partnered companies, including furniture rental platform Furlenco, travel booking site ixigo, healthcare startup Curefit, and holiday rental platform Airbnb to provide offers and discounts. The offers increase in value as customers use Cred more, Mint had reported on 27 November.
Sequoia Capital did not respond to an email seeking comment.
Startups whose founders were previously successful with other ventures tend to find it easier to raise funds regardless of the business model, as investors trust the founders’ skills. One example is Mukesh Bansal and Ankit Nagori's Curefit, which has repeatedly raised large sums since launch.
“Because of Kunal’s track record, investors are quite confident that he’ll pull off something interesting with Cred, although they may not be quite sure on what the end game is," said an investor with one of India’s leading venture capital funds, on condition of anonymity. “So even if the valuation may be a little excessive, they still believe that the founder will make it big."