Indian startups continue to see pressure on their valuations while fundraising from new investors.
Cred has raised $72 million in a fresh funding round, ET reports. The round valued Cred at $3.5 billion, which is 45% below its last valuation. Cred was valued at $6.4 billion in 2022 when it had last raised funds.
According to filings with the ministry of corporate affairs, Cred has received Rs. 354 crore from Lathe Investment, which is wholly owned by Singapore’s sovereign fund GIC. It also received an infusion of Rs. 74 crore from RTP Global, Rs. 25.8 crore from Sofina Ventures, and Rs. 162 crore from Kunal Shah’s family office, QED Innovation Labs. The entire infusion is in the form of primary capital, which means no existing investor has sold any shares in this round.
Cred was founded in 2018. Just a year later, Cred was valued at $450 million, and in late 2020, had seen its valuation zoom to $800 million. Just a few months later, in April 2021, Cred had seen its valuation jump nearly 3x to 2.2 billion, and had become a unicorn. In November 2021, Cred had doubled its valuation to $4 billion, and in June 2022, Cred had raised funds at a valuation of $6.4 billion. Cred, in effect, had seen its valuation grow 15x in three years.
But the next three years have gone very differerently. After after being valued at $6.4 billion in 2022, Cred now seems to be seeing its valuation slashed by as much as 45 percent, valuing it less than not only its last funding round at $6.4 billion, but also the round prior to that which had seen it be valued at $4 billion. A host of other Indian startups have seen similar funding cuts — the post-Covid liquidity infusion by world governments had caused the valuations of startups to rise, and they now seem to be reverting to the mean.
Cred, for its part, has never made a profit, but is narrowing its losses. In FY24, Cred had reported revenue of Rs. 2,473 crore, up 66% from the previous year, while its loss was Rs. 609 crore, down from Rs. 1,024 crore the year prior.