Fintech unicorn Cred is reportedly aiming to raise between US$100 million and US$200 million in a new funding round.

This new round comes at a post-money valuation of US$4 billion, a significant decrease from its previous valuation of US$6.4 billion in 2022.

The funding is intended to support Cred’s growth plans, which focus on profitability and a potential initial public offering (IPO) within the next two years.

Founded in 2017 by Kunal Shah, Cred began as a credit card bill payments platform and has since evolved into a super app that offers UPI payments, utility billing, vehicle management, and travel services.

🔗 Source: Inc42

🧠 Food for thought

1️⃣ CRED’s valuation haircut reflects the broader correction in global fintech funding

CRED’s acceptance of a significantly lower valuation ($4 billion, down from $6.4 billion) mirrors the substantial downturn in fintech investments globally.

India’s fintech sector experienced a 51% drop in funding in 2024, with total investments falling from $7 billion to just $3.5 billion amid market uncertainty1.

This correction isn’t isolated to India, as global fintech investment plummeted 48% in 2023, with investors shifting focus from aggressive growth to sustainable business models2.

The average deal size in Indian fintech rose to $16.1 million despite fewer deals, indicating investors are making larger, more strategic bets on established players like CRED rather than spreading investments across numerous startups1.

CRED’s ability to secure funding despite accepting a lower valuation demonstrates how late-stage companies with established market positions remain attractive even in challenging markets, reflecting the 47% increase in late-stage funding in Q1 20253.

2️⃣ “Super app” strategy signals a shift from growth-at-all-costs to sustainable revenue models

CRED’s expansion beyond credit card payments into multiple services (UPI, utilities, investments) represents a strategic pivot being adopted by leading fintechs facing funding pressures.

The payments segment, CRED’s original focus, experienced a particularly sharp 77% decline in funding (attracting only $194 million in 2024), pushing established players to diversify revenue streams4.

CRED’s acquisition of investment platform Kuvera and launch of loan products against mutual funds directly addresses the need to create multiple revenue channels as standalone payment businesses face profitability challenges.