Fintech major Cred has become the latest in a string of unicorns to raise capital at a lower valuation than in previous rounds. Earlier this week, the Kunal Shah-founded company secured fresh funding at a $3.5 billion valuation, marking a steep 45% cut from its 2022 peak of $6.4 billion.
With this, Cred joins the likes of Byju’s, PharmEasy, Meesho, ShareChat, and Udaan, once high-flying startups that have all seen their valuations tumble during recent fund raises. The latest downround was led by Lathe Investment, RTP Global, Sofina Ventures, and Shah’s own QED Innovation Labs.
The valuation correction underscores the pressure facing unicorns amid a capital environment that has shifted decisively from growth-at-all-costs to a focus on profitability.
Known for its credit card rewards platform, Cred was one of the poster children of fintech surge. In FY24, the company reported a 66% rise in revenue to Rs 2,473 crore and cut its operating loss by 41% to Rs 609 crore. Financials for FY25 are yet to be disclosed.
Cred’s trajectory mirrors a broader trend. Edtech firm Byju’s, once India’s most valuable startup at $22 billion, has seen its valuation plunge to near zero amid financial mismanagement and governance crises. Healthtech firm PharmEasy faced a roughly 90% valuation haircut in April last year, raising $216 million at a $710 million valuation, down from a $5.6 billion peak.
Meesho’s valuation was slashed to $3.5 billion by investor Fidelity in January, 2024 and subsequently inched up to $3.9 billion later that year during a May fundraise that brought in $275 million. ShareChat’s valuation reportedly dropped from nearly $5 billion to $2 billion in a $49 million convertible debt round in April last year. B2B e-commerce player Udaan’s value halved to $1.8 billion in its April 2023 Series E round.
Some startups haven’t raised new funds but have seen their valuations marked down by investors. Ride-hailing firm Ola’s worth has been cut three times by US-based Vanguard, most recently to $1.9 billion, a 74% fall from its $7.3 billion high.
Swiggy’s valuation too was repeatedly revised downward by Invesco after its $10.7 billion funding round in January 2022. Invesco first marked it down to $8.2 billion in April 2023, then $5.5 billion the following month, before marking it back up to $7.85 billion in October. Swiggy eventually went public in late 2024 at a valuation of $11.2 billion.
These developments highlight a reset in the venture ecosystem since the 2021 funding frenzy, fueled by ultra-low interest rates and investor exuberance. While capital is slowly returning to the ecosystem, the new normal demands leaner operations, disciplined growth, and a clear path to returns.