CRED Looks To Raise Up To $200 Mn With Steep Cut In Valuation

Fintech unicorn Cred is looking to raise $100-200 Mn in a new funding round that would value the Kunal Shah-led startup at $4 Bn post-money, a considerable decrease from its $6.4 Bn valuation set in 2022, as per Economic Times.

The Bengaluru-based startup is in talks with existing investors, including Singapore sovereign fund GIC, Peak XV Partners, Tiger Global, Ribbit Capital and QED Innovation Labs to raise fresh capital.

It is important to note that CRED last raised $140 Mn in its Series F funding round led by GIC in 2022. The round valued the company at $6.4 Bn.

Inc42 has asked for a comment from the company on why it is taking a valuation haircut of almost $2.5 Bn in the new round. The story will be updated based on the response.

As per the report, the fresh funding will ensure that CRED remains well-capitalised to execute the next phase of its growth journey amid increased revenue and reduced cash burn. The fintech giant is eyeing profitability and is likely to launch an initial public offering (IPO) in the next two years. 

CRED saw its operating revenue swell by a whopping 71% to INR 2,397 Cr in the fiscal year 2023-24 (FY24) from INR 1,400 Cr in the fiscal prior. Despite growth in the top line, CRED’s net loss surged 22% to INR 1,644 Cr during the year from INR 1,347 Cr in FY23.

CRED Presses The Pedal On Super App Ambitions

The brainchild of Shah, CRED started in 2017 as a credit card bill payments platform. However, it has taken a super app path over the past few years as it broadens its fintech ambitions. 

CRED now caters to UPI payments, billing for utilities, vehicle management, travel experiences, among others. Last year, it also acquired investech platform Kuvera to take on the likes of Zerodha, Groww and PhonePe.

In February, the company launched CRED Cash+, a loan against mutual funds product for its customers, a move that pitted it against companies like Jio Financial Services, BharatPe, smallcase and Bajaj Finserv.

Earlier, it was also reported that CRED was mulling to infuse INR 550 Cr in its non-banking finance company (NBFC) Newtap Finance Pvt Ltd. Incorporated in 2021, NFPL is an NBFC that offers short-term personal loans to CRED users.

CRED is not alone in the supper app race. With a burgeoning pool of digital consumers, companies like PhonePe, Groww, Jio Financial Services, Flipkart, among others, have also decided to take a stab at developing an all-in-one app.

Besides CRED, the likes of Groww, PhonePe and BharatPe, are also looking to join the startup IPO party. Groww is reportedly planning to file draft papers for its $1 Bn+ IPO in April-May and is eyeing a public listing by the end of FY26. Meanwhile, PhonePe has also begun preparations for its IPO.