With the acquisition of HipBar, CRED aims to encourage users to spend more on the platform

CRED is poised to mark its first acquisition with the upcoming acquisition of Chennai-based alcohol payment and delivery startup HipBar. The acquisition will enable a license to offer a semi-closed wallet to CRED users.

The semi-closed wallet, also known as the prepaid payment instrument license (PPI), enables the holding company to issue cash vouchers, prepaid cards and more in addition to the digital wallet. So far, only 37 companies in the country have received a license from RBI.

A confirmation of the development is the appointment of Kunal Shah and his brother Rohan Shah as additional directors on HipBar’s board list, as shown by HipBar’s applications for approval. Its co-founder and director Rajalakshmi Natarajan has left the company.

According to a separate filing, the share capital held by Natarajan and Prasanna was acquired by CRED holding company Dreamplug Technologies.

Under the share purchase agreement concluded by DreamPlug Technologies (CRED), Rajalakshmi Natarajan, Prasanna (Promoter) and Sipping Spirits Pvt Limited, CRED has purchased 175.67.568 shares from the promoters and 255.00,000 preferred shares from Sipping Spirits.

The purchase consideration is not yet known, but it is a 100% buyout that allows the founding team and investors a complete exit.

With the takeover, CRED can begin giving cashback in its wallets instead of user bank accounts and card accounts. Several experts point out that the wallet license would allow the Bengaluru-based company to include cashbacks offered by the company in its ecosystem (for credit card billing and purchases from its trading partners). A crucial step up as the volume of transactions grows as cashback continues to be the biggest driver of both user engagement and acquisition for the company.

“It seems like a smart move as the wallet would allow CRED to control repeated transactions through its own payment instrument,” said one of the fintech company’s entrepreneurs, asking for anonymity.

The takeover of HipBar was the first reported by Mint.

CRED is a member-only payment platform for credit card statements that rewards members for paying their credit card statements on time with cashbacks and reward points that can be redeemed in a variety of ways. With over 1,300 brand partners, CRED claims to have a customer base of 7.5 million and a share of 20% in all credit card bills in India.

The Kunal Shah-led company recently announced a $ 251 million increase in its Series E round at a valuation of $ 4.01 billion (after receipts). CRED is one of the few startups that set up three back-to-back rounds within a year.

CRED had forecast 208-fold growth in operating income to Rs 108 billion in FY21. According to Trickypedia, the two and a half year old company’s operating costs will increase by an estimated 79% to Rs 677 billion in FY21 Rs 378.4 billion in FY20… It is important that these figures do not come from the audited financial statements, as CRED has yet to present the annual financial statements for FY21.

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