India: CRED completes $1.2m worth ESOP buyback as part of $81m fundraise

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Bengaluru-based credit card payment app CRED has raised $81 million in its Series C round at a post-money valuation of $806 million. In the process, the company has also bought shares worth $1.2 million (about ₹9 crore) from employees.

The employee stock ownership plan (ESOP) buyback was completed on 1 January. This is the first ESOP liquidity programme initiated by CRED, just two years into its operations. Employees who hold vested stocks were eligible to sell up to 50% of their vested ESOP shares in the company. The fundraise was led by existing investors DST Global along with Sequoia Capital, Ribbit Capital, Tiger Global, and General Catalyst. In addition, Sofina, Coatue and Satyan Gajwani of Times Internet also participated in this round.

“As we raise funds to support our next phase of growth, it’s important to acknowledge the role that employees have played in our success. We are committed to enabling wealth-creation opportunities for them and have allocated 10% of our cap table allocated for ESOPs even at the Series C stage. I am grateful for their conviction, as well as that of our investors, and am focused on creating value for them as the product and business evolves,” said Kunal Shah, Founder, CRED.

The startup said it grew to over 5.9 million high-trust individuals with a median credit score of 830. CRED processes 20% of all credit card bill payments in India. Over 35% of premium credit card holders in India are on CRED, with members spending 2X of the average credit card user in India. The recently launched CRED Pay offering takes the CRED experience to platforms of online merchants, who offer instant, one-click credit card payments for CRED members.

Several startups, including Unacademy, Zerodha, CarDekho, BharatPe, Meesho, and Swiggy announced ESOP buybacks in 2020. In November, Indian food-tech unicorn Swiggy initiated an ESOP liquidation programme worth around $7-9 million to reward its employees as the food delivery business is making a recovery to pre-covid levels.

ESOPs assume more significance when they happen in a year where many Indian startups have witnessed a financial crunch amid the covid-19 pandemic.

This article was first published on livemint.com

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.