Kunal Shah-led Cred to raise $75 million from existing investors in a down round

Cred Kunal Shah

Fintech unicorn Cred is set to raise around $75 million from its existing investors in a down round, which will include Singapore’s sovereign wealth fund GIC, Sofina and RTP Global, according to people familiar with the matter.

The funding, which will value the Bengaluru-based startup at approximately $3.5 billion, marks a sharp drop from its previous $6.5 billion valuation and comes amid a broader funding slowdown in India’s startup ecosystem.

"The overall market is seeing correction, especially the fintech ecosystem. The down round is just the reflection of that," said one source requesting anonymity.

The fresh capital will likely help Cred strengthen its core credit card payments business, while also expanding into new financial services, including lending and wealth management. Other existing investors may also participate in the round, though details on the full investor lineup are still being finalized.

Startup media platform Entrackr reported the developments first. A spokesperson for Cred declined to comment on the fundraising.

Cred, founded in 2018 by serial entrepreneur Kunal Shah, rewards users for paying their credit card bills on time. Over the years, the startup has evolved into a broader financial platform offering products such as Buy Now Pay Later (BNPL), personal loans, and a peer-to-peer lending product called Cred Mint.

Cred's revenue surged 67 percent on-year to Rs 2,473 crore in FY24, with operating losses down 41 percent. It targets EBITDA breakeven by FY26 despite rising credit costs.

Investor caution and market corrections are bringing back down rounds in the ecosystem.

Also Read: Stanza Living, CityMall mull fresh funding at marked down valuations

A down round refers to a funding event where a company raises money at a lower valuation than in its previous round, signalling a recalibration of investor expectations. While not uncommon, down rounds reflect changing market dynamics, where capital is tighter and business fundamentals are scrutinised more closely.

Currently, at least two other new-age companies - Stanza Living and CityMall - are in talks to raise funds at reduced valuations, sources told Moneycontrol. Larger startups like Oyo, Meesho, and Udaan also navigated similar down rounds through 2023 and 2024 amid growing investor conservatism.