News By/Courtesy: Aakash Raj | 05 Jan 2021 16:23pm IST

HIGHLIGHTS

  • Money raised CRED and ESOP buyback program
  • Increase in Credit Cardholders
  • Success of CRED

CRED is a Bangalore-based fintech company founded by Kunal Shah, who founded his first venture FreeCharge. The idea behind CRED is to reward its customers whenever they pay their credit card bills. The company aims to reward the creditworthy and trustworthy individual who earlier had to incur hidden charges and interest costs while paying amounts that are less than the full amount due in the bills. Recently CRED fetched funding of $81 Million at a post-money valuation of about $806 Million. The company also bought shares worth $1.2 Million from its ESOP buybacks program. CRED initiated the ESOP buyback program just 2 years after it was founded which displays how the Indian startup founders are now including their employees in the company’s capital table from the very period of the company’s incorporation. The fundraisers for CRED are from their own investor DST Global along with other investor groups. The company currently has many multinational companies and brands as their members including Samsung, Syska, Tissot, Puma, Tanishq, and so on. During the season of the Indian Premier League, the company aggressively marketed its brand and targeted creditworthy customers. Fees that are received from these brands and various financial institutes gave enabled CRED to monetize themselves and improve their market standing. The demand for credit cards in the Indian market has increased and outstanding credit card dues have declined by about 10% during the initial time of pandemic as a consequence of flattening of consumer sentiments, as stated by the RBI. Along with CRED many other brands too initiated their ESOP buyback programs amid Covid-19 which shows that the importance of employee schemes is on the rise. Unlike in the west, Indian startups created ESOP at the last phase of the company, and now the change in work culture and induced these companies to create ESOP at the very stage of company incorporation. This would not improve wealth creation but also attract talented individuals having startups. CRED has been reported to have acquired a customer base of about 5.9 million having a median credit score of 830. The company also claims to have processed 20% of all credit card transactions in India and boasts of having 35% of premium credit cardholders who transact double the times as compared with an average credit card holder in India. It is also reported that over 1/3rd of members visit the CRED platform at least 3 times in a month.

 

 

This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being.

Section Editor: Pushpit Singh | 07 Jan 2021 7:05am IST


Tags : #CRED #RisingCreditCards #ESOPBuybackMust

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