CRED is all set to mark its first acquisition with the impending acquisition of Chennai-based alcohol payment and conveyance startup HipBar. The acquisition will facilitate a permit to offer a semi-shut wallet to CRED’s users.
Also called a prepaid payment instrument permit (PPI), the semi-shut wallet enables the holding firm to give cash vouchers, prepaid cards and more, other than the digital wallet. Only 37 firms in the nation have been given the permit by the RBI up until this point.
A confirmation of the advancement is the appointment of Kunal Shah and his brother Rohan Shah as additional directors on HipBar’s board list, as HipBar’s regulatory filings show. Its fellow benefactor and director Rajalakshmi Natarajan has left the company.
According to a separate filing, the share capital held by Natarajan and Prasanna have been acquired by CRED’s holding firm Dreamplug Technologies.
According to the share purchase agreement went into by DreamPlug advances (CRED), Rajalakshmi Natarajan, Prasanna (advertisers) and Sipping Spirits Pvt Limited, CRED has purchased 175,67,568 value shares from the advertisers and 255,00,000 preference shares from Sipping Spirits.
The purchase consideration isn’t known at this point, however it’s a 100% buyout, giving a full exit to the founding team and investors.
With the acquisition, CRED can start giving cashback in its wallets instead of client bank accounts and card accounts. Several specialists point out that the wallet permit would allow the Bengaluru-based company to contain cash backs presented by the company inside its environment (for credit card charge payments and buying from its merchant partners). A critical move forward as its transaction volumes scale up, as cashbacks remain the largest driver of both client engagement and acquisition for the firm yet.
“It appears to be a smart move as the wallet would enable CRED to drive repeat transactions through its own payment instrument,” said one of the entrepreneurs from the fintech firm requesting anonymity.
HipBar’s acquisition was first revealed by Mint.
CRED is an individuals only credit card charge payment platform that rewards its individuals for clearing their credit card charges on schedule with cashbacks and reward points that can be recovered in many ways. With more than 1,300 brand partners, CRED claims to have a customer base of 7.5 million and a 20% value share of all credit card charge payments in India.
The Kunal Shah-drove company as of late announced a $251 million raise in its Series E round at a valuation of $4.01 billion (post-money). CRED is one of the handful of startups to raise three back to back rounds within a year.
CRED had extended a 208X development in its operating incomes to Rs 108 crore during FY21. According to Fintrackr, the more than two year-old company’s operating costs are estimated to flood by about 79% to Rs 677 crore in FY21 from Rs 378.4 crore in FY20. Importantly, these figures are not from the audited statements as CRED is yet to document the annual financial statement for FY21.
