InCred Finance Hits Unicorn Status with $1.04B Valuation After $60M Funding

By siliconindia  |  Tuesday, 26 December 2023, 09:15 IST

InCred Finance Hits Unicorn Status with $1.04B Valuation After $60M Funding
InCred Finance, the lending division of the financial services company InCred, has entered the unicorn club, attaining a valuation of $1.04 billion following a prosperous $60 million Series D funding round. The non-banking financial company (NBFC) revealed this achievement, marking it as the second company to become a unicorn in 2023, following the 10-minute grocery delivery startup Zepto.
The equity round, spearheaded by Ranjan Pai of MEMG, saw significant investments, with $9 million from Pai himself. Ravi Pillai, Chairman at RP Group of Companies, and Ram Nayak, Global Co-Head of the Investment Bank and Head of Fixed Income & Currencies at Deutsche Bank, also contributed $5.4 million and $1.2 million, respectively. In addition to these key investors, the funding round witnessed participation from various large ultra-high-net-worth individuals, family offices, and institutional investors, including Varanium Capital Advisors and Sattva Group.
Bhupinder Singh, Founder & Group CEO of InCred, expressed his confidence in the funding’s impact, stating, “The funding will strengthen our balance sheet and provide us enough runway for the next couple of years of expansion. With our ‘Risk First’ approach, cutting-edge technology, and class-leading management team, we are well-positioned for sustained growth in the business over the years to come".
InCred Finance plans to strategically deploy the raised capital across its core business verticals, focusing on consumer loans, student loans, and MSME lending. The company highlighted the surging market for student loans in India, driven by a doubling of US student visas issued to Indians from 50,000 to 100,000 over the past two years. Simultaneously, the MSME business is experiencing substantial growth, especially in the secured LAP market nationwide, while the consumer lending business benefits from healthy demand driven by overall economic growth and the usual festive season boost.
InCred Finance proudly showcases a loan portfolio surpassing Rs 7,500 crore, exhibiting an impressive 50% Compound Annual Growth Rate (CAGR) over the past three years. The profit before tax (PBT) for FY22 amounted to Rs 42 crore and surged to Rs 203 crore in FY23. According to data provided by Statista, digital lending stands out as one of the swiftest-growing segments in India's fintech landscape, anticipated to reach a valuation of $350 billion by 2023. This growth is noteworthy, having escalated from $9 billion in 2012 to almost $150 billion in 2020. Another report by IIFL Infotech forecasts that India's digital lending market is poised to reach $515 billion by the year 2030.
Despite the positive projections for digital lending, the Reserve Bank of India has recently increased risk weights on personal loans, loans extended to non-banking financial companies (NBFCs), and credit cards. This action comes with a cautionary note about a potential crisis in the unsecured loan sector. The consequence of this adjustment is expected to manifest in elevated lending rates and a deceleration in the growth of these specific segments.

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