Cred raised $900 million from Meta. The founder left to work at WhatsApp. Meta owns WhatsApp. Meta just funded a company so they could hire its CEO for a different company they already own.
This is corporate efficiency at its finest. Why poach talent directly when you can invest nearly a billion dollars in their startup first? The extra steps make it legitimate. Like buying someone dinner before you steal their wallet.
Cred is worth $4 billion now. Was worth $4 billion. Will be worth something else tomorrow. The valuation doesn't matter because the person who built it now works for the company that just wrote the check. He gets to keep his equity though. So he's investing in himself by leaving himself. Modern finance is just a series of people paying themselves with other people's money while changing conference rooms.
The remaining Cred employees must feel spectacular about this deal. Their CEO took Meta's cash and then took a job at Meta's subsidiary. They're still at Cred. He's at WhatsApp. But hey, the company has $900 million in fresh capital and zero percent of the leadership that made it a $4 billion company. That's called a growth opportunity in pitch decks.
Some retail trader in Cleveland just read this headline and thought it was bullish for Indian fintech. He's already researching Cred's competitors. He's making a spreadsheet. He doesn't know Cred isn't publicly traded. He'll figure that out after he tries to buy it on Robinhood.
Meta looked at this founder and decided he was worth joining WhatsApp. Then they looked at his company and decided it was worth $900 million without him. One of those assessments is wrong.
Photo by Mariia Shalabaieva on Unsplash
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