Unicorn in the field of finance Cred obtains $80 million from GIC and other investors with a valuation of $6.2 billion

According to Cred's filings with the Ministry of Corporate Affairs (MCA), the credit card payment platform raised $80 million in a Series F investment round sponsored by Singapore's sovereign wealth fund GIC, with participation from previous investors.

The Kunal Shah-led firm, according to reports, has raised the funds at a valuation of almost $6.22 billion. The value was derived using the rupee's most recent closing price against the US currency.

Tiger Global, Sofina Ventures, Alpha Wave Ventures, and DF International were among the existing investors in the round. Cred may also raise more money as part of its Series F funding round, according to regulatory filings.

The fintech firm is reportedly in talks to raise $300 million at a valuation of over $6 billion. A Middle Eastern crossing fund was anticipated to lead the fresh round, with Tiger Global Management and Falcon Edge Capital as existing backers (Alpha Wave).

Cred announced in a statement that it is raising its Series F financing, valuing the company at $6.4 billion. GIC will lead a $140 million round led by Sofina, Tiger Global, FalconEdge, and Dragoneer, with existing investors Sofina, Tiger Global, FalconEdge, and Dragoneer. Cred claimed there will be a supplementary component to the round, but he didn't elaborate.

Cred has issued 42,308 Series F compulsory convertible preference shares (CCPS) with a face value of Rs 100 each for a premium of Rs 1,47,746 in exchange for cash consideration of Rs 617 crore ($79.25 million).

According to regulatory papers, the cash will be used to expand the company's business and for 'future expansion,' which includes addressing long-term and short-term finance requirements as well as general corporate reasons.

The news was first reported by Entrackr, which stated that the company had raised financing at a valuation of $6.2-6.5 billion.

Cred was launched in 2018 by serial entrepreneur Kunal Shah to let India's most credit-worthy consumers pay their credit card bills and earn points. Since then, it has grown into loans, e-commerce payments, brand advertising, and short-term borrowing through Buy Now Pay Later (BNPL) alternatives.

Cred has amassed a loan book of over Rs 2,000 crore in the previous year and a half, with low defaults presumably because to its focus on high-credit-worth customers. Cred Pay, the company's payments division, processes transactions worth $500 million per year in GMV (gross merchandise value), on which it has yet to turn a profit.

Cred is also attempting to persuade investors that it has the potential to become a competitor to Affirm, a US-based startup that permits BNPL to be used for online transactions. Affirm now has a market valuation of little more than $6 billion. The corporation, on the other hand, had a market capitalisation of $24 billion when it was listed.

When Cred raised $251 million from current investors in October of last year, it was valued at $4 billion.

Cred's commerce play is also being bolstered by the addition of various online-only consumer brands to its platform, according to Shah, one of India's most well-known new-age entrepreneurs and a prolific angel investor. It just launched a zero-commission Cred store onboarding platform, which exempts all brand partners from listing costs and commissions from each sale.

While Cred has quickly grown into payments, loans, investment, and commerce, it is unclear how it will cross-sell, upsell, and monetize any of these engines.

Cred's losses increased by 45 percent year over year in March, to Rs 524 crore for the period ended March 31, 2021, from Rs 360 crore the previous year, despite a 5x increase in sales to Rs 18.16 crore.

Cred's funding comes at a time when overall funding to Indian businesses has stalled due to a fall in IT startup valuations around the world. Many prominent private equity and venture capital firms, such as Tiger Global and SoftBank, have reduced the size of their high-growth company checks.