CRED forays into wallet payments business, acquires liquor delivery startup HipBar
- ByStartupStory | October 22, 2021
CRED, a member-only fintech and e-commerce platform, is entering the wallet payment industry by acquiring HipBar, a liquor delivery startup. The consideration for the purchase is not yet known, but it is a 100% buyout, paying off the founding team and investors in full.
The acquisition will facilitate obtaining a license to offer a semi-closed wallet to CRED users. According to Mint, CRED founder Kunal Shah and his brother Rohan Shah Naresh have joined HipBar’s board of directors with the intention of obtaining a prepaid payment tool (PPI) license for this alcohol distribution start-up. The report adds that with this acquisition, a large number of HipBar employees will join CRED, including one of its founders, Prasanna Natrajan.
Also known as Prepaid Payment Instrument (PPI) license, the semi-closed wallet allows the holding company to donate cash vouchers, prepaid cards and more except the digital wallet. So far, only 37 companies nationwide have obtained RBI approval, including Paytm, MobiKwik, Ola and Pine Labs, PhonePe, Spice Money, Amazon Pay and more. related to the IPO.
The deal follows HipBar’s decision to exit its alcohol delivery business, which in such a model suffers from regulatory hurdles in all states. Cred’s interest in the startup stems from its intention to add a layer of payment wallets to its platform using HipBar’s PPI, which will allow them to offer consumers cashback rewards.
Since August 2016, HipBar has obtained a PPI license, which allows consumers to purchase a range of alcoholic beverages and use their wallets to pay.
Diageo, a global spirits producer, acquired a 26% stake in HipBar in 2018, but exited the startup earlier in July this year and sold its full ownership to HipBar developer Natarajan for $5.2 million rupees, leaving a loss of 98 % was eliminated. HipBar achieved a turnover of more than Rs 50 lakh in the fiscal year 2020 and its net assets of Rs 7.76 Cr which is lower than its turnover of Rs 1.4 Cr in year 19 and its net assets of INT 19.6 Cr.
As a pioneer in alcohol delivery, HipBar’s journey has been marred by lawsuits over the years. While operating in the West Bengal and Odisha markets, it had to shut down its services in Karnataka due to rejection by local retailers.
With more than 1,300 partner brands, CRED claims a customer base of 7.5 million customers and a 20% value share of all credit card payments in India.
Kunal Shahled company recently announced that it has raised $251 million in its Series E round for a valuation of $4.01 billion (postal money). CRED is one of the few startups to pick up three consecutive rounds in one year.
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