Cred Army

Good evening,

It’s raining unicorns in India with two startups — Meesho and Cred — entering the coveted club in as many days.

Also in today’s letter:

💰Clubhouse’s monetisation play
⚖️Court relief for ByteDance
👨‍💻Rising demand for tech talent

Cred is India’s newest startup unicorn


Two-year-old Cred has become one of India’s youngest startup unicorns by landing $215 million in new funds. The round was led by new investor Falcon Edge and existing investor Coatue Management.

Valuation jump: Cred’s valuation has jumped to $2.2 billion from $800 million just three months ago, when it raised $81 million in its Series C round.

ESOP buyback: The Bengaluru-based fintech startup is also kicking off a buyback of employee stock option plans (ESOPs) worth $5 million for eligible employees, founder Kunal Shah told employees on Tuesday. This comes on the heels of a similar buyback worth $1.2 million in January.

  • “While most of you were keen on retaining your stock options during the Series C, we are committed to a culture of creating wealth for stakeholders and are therefore offering another ESOP buyback opportunity to you,” Shah told employees.

Cred’s playbook: Cred has been sort of a contrarian unicorn. While most Indian Internet companies are devising strategies for the “next billion users”, Cred has limited its audience to India’s upper and upper-middle classes to earn higher returns per user. The company claims to currently have 5.9 million users with a median credit score of 830.

In terms of its product, which is a hotly debated topic in startup circles, Cred started off by rewarding customers for paying their bills on time with various benefits. It has slowly evolved into a curated marketplace for premium direct-to-consumer products. Last year, Cred also strengthened its monetisation strategy with two new products — a monthly rent payment product called Rentpay and a personal loan product for eligible customers called Cred Cash. In December it launched Cred Pay, a payment checkout facility with Visa and RazorPay for select merchants.

  • Cred has already disbursed loans worth Rs 1,000 crore in the past 12 months, according to the Morning Context. It charges anywhere from 12% to 15% interest on these loans. It claims to have signed up over 1,500 merchants for Cred Pay.
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India’s unicorn rush in 2021: Cred is now the sixth unicorn to emerge from the Indian startup ecosystem this year. Others include insurance tech platform Digit, health-tech SaaS platform Innovaccer, online marketplace for construction material Infra.Market, non-bank lender Five Star Business Finance and social commerce platform Meesho.

You can now pay (some) creators on Clubhouse


Invite-only social audio app Clubhouse has rolled out its first monetisation feature for creators. This means users will now be able to send payments directly to creators on the platform.

Details: While all users will be able to send money, only a group of select users will be able to receive payments for now. Clubhouse said it will expand this feature to include all users in phases.

  • The entire payment will go to the creator and Clubhouse will not take a cut of the transaction, the company said. Users who send a payment will however be charged a nominal card processing fee by Clubhouse’s payment processing partner Stripe.

This launch comes on the heels of Clubhouse debuting its first creator accelerator programme last month, through which it aims to help 20 creators build their audiences and monetise their shows.

Is Social Audio the new Stories? These initiatives are crucial for the Andreessen Horowitz-backed startup to attract creators. While Clubhouse pioneered the live audio format last year, it will now have to defend itself against growing competition from several tech companies including Twitter, Spotify, Facebook, LinkedIn, Slack, Telegram, and Discord, which have either launched or are working on their own social audio features.

  • This is reminiscent of how Snapchat pioneered the Stories format but was later copied by tech majors such as Facebook, Google, Twitter, Spotify and LinkedIn.
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A key roadblock for Clubhouse in India is that it is still restricted to iOS. The upcoming Android app could provide a much-needed boost. That said, rival Twitter has taken the lead on this, having rolled out its social audio offering called Spaces to Android users last month.

Tweet of the day

ETtech Done Deals

Trading information for KKR and Co is displayed on a screen on the floor of the NYSE in New York

US private equity giant KKR has raised a record $15 billion for its fourth Asia fund as it looks to tap into a growing appetite for private institutional capital in the region. The firm claimed this was the largest private equity fund focused on the Asia Pacific region, adding that a substantial portion of it would go to businesses in India.

KKR’s Asia Pacific Private Equity portfolio currently includes investments in around 60 companies across 11 countries. Its portfolio firms in India include Jio Platforms, Reliance Retail, Emerald Media, Max Healthcare, Eurokids International and JB Chemicals.

  • Early-learning toy company PlayShifu has raised $17 million funding in a round led by Inventus Capital India and also including Inflexor Ventures, Chiratae Ventures and Bharat Innovation Fund. The startup plans to launch eight new products this year.

  • Bengaluru-based edtech platform AntWak has raised more than $1 million in seed financing in a round led by Matrix Partners India with participation from Better Capital founder Vaibhav Domkundwar and CRED founder Kunal Shah. The startup plans to use the funds to invest in content and education infrastructure, and build a marketing and inside sales team.

Don’t freeze Bytedance accounts completely, says high court

FILE PHOTO: ByteDance logo is seen in this illustration

The Bombay High Court has granted minor relief to TikTok parent firm ByteDance by directing two banks to freeze only Rs 79 crore of the company’s funds in its accounts and leave the rest untouched.

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HSBC and Citibank had frozen Bytedance’s bank accounts following a directive from the indirect tax department last month over allegations of tax evasion. The Chinese Internet conglomerate had later challenged this move in the Bombay High Court.

Meanwhile, ByteDance has been restructuring its TikTok team in the country. TikTok’s India head Nikhil Gandhi and others working in the technology team have been moved under the MENA, GCC and Turkey region. This move is in line with the company’s plans for an IPO for TikTok Global in October, sources had told ET.

Demand for tech skills jumps 22%

The demand for technology skills among global development centres, or captives, in India grew 22% during the second half of the past financial year, said staffing and business solutions major Quess.

Between October 2020 and March 2021, IT security and full-stack developers witnessed 166% and 110% growth from captives respectively. Banking and financial services, auto and engineering, and technology services and consulting also contributed to the demand significantly, Quess said.

Bengaluru saw the highest growth in demand, followed by Hyderabad, Chennai, Mumbai and Pune.

Also read: Startup salaries swell amid pandemic-induced funding boom

Today’s ETtech Top 5 was curated by Vikas SN in Bengaluru.



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