Exclusive: CRED to acquire expense management firm Happay

Kunal Shah’s CRED appears to be aggressively acquiring companies —a strategy it steered clear of for about the first two years since its inception. CRED is on the brink of acquiring expense management firm Happay.

The two companies have been engaged in talks for the past few months and the terms of the deal have been sealed, said two people familiar with the details of the transaction. “The deal is a mix of cash and stock which will value Happay at over $150 million,” said one of the people requesting anonymity.

CRED has confirmed the acquisition talks to Entrackr. Happay will be CRED’s second acquisition after HipBar — an alcohol delivery startup which it acquired in October. 

CRED is also reportedly in talks to acquire Times Internet-owned Dineout and Rainmatter-backed debt investment platform WintWealth. However, these talks are early and the Bengaluru-based company is yet to confirm them.

Shah’s other entity Newtap Technologies reportedly acquired fintech firm Parfait.

As for Happay, it provides expense management for corporates to manage travel and tax benefits for their employees. The company offers specialised solutions for large businesses with multiple branches and surface logistics companies. 

The decade-old firm also enables large enterprises to issue prepaid and credit cards and manages expenses for 800K- 900K employees who are employed with 6,000 firms including 100 large enterprises.

“Employees usually use credit cards for making professional expenditures and Happay’s acquisition will bring them under CRED’s funnel,” said the second person, also requesting anonymity.

As of now, Happay has raised $22-25 million across several financing rounds. According to TechCircle’s estimates, it was valued at about $60 million during its extended Series B round in 2019. If CRED acquires Happay in the above range, it will be a lucrative exit for the latter’s stakeholders.

While Happay is yet to file its annual financial statement for FY21, the company’s operating revenue grew 49% to Rs 37.55 crore in FY20 from Rs 25.12 crore in FY19. During FY20, its losses surged 95% to Rs 49.20 crore.

This year has been incredible for CRED when it comes to the quantum of money raised. The firm mopped up $466 million in 2021 and is set to join Razorpay and Meesho who are also in talks to corner new rounds at valuations over $5 billion. Entrackr had exclusively reported about CRED’s new round which would value the three year-old-company at over $5.5 billion.