InCred Finance, the lending business of financial services firm InCred, which had last month announced $60 million in Series D funding, has turned unicorn. The non-banking financial company (NBFC) is now valued at $1.04 billion following the latest funding and has become the second company (after 10-min grocery delivery startup Zepto) to gain unicorn status this year, it announced in a statement on Monday.
The equity round was led by Ranjan Pai of MEMG who invested $9 million followed by 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, who invested $5.4 million and $1.2 million, respectively.
In November, the company hadn’t disclosed the names of the investors and the valuation.
Bhupinder Singh, Founder & Group CEO of InCred said 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 said it will strategically deploy the capital across its core business verticals viz., consumer loans, student loans, and MSME Lending.
According to the company, the market for student loans in India has surged, driven by the doubling of US student visas issued to Indians from 50,000 to 100,000 over the past two years. On the other hand, the MSME business is seeing substantial growth, particularly in the secured LAP market nationwide while the consumer lending business is benefitting from healthy demand driven by overall economic growth as well as the usual festive season boost, it said.
InCred Finance has a loan book of over Rs 7,500 crore, growing at 50 per cent CAGR over the last three years. Its profit before tax (PBT) stood at Rs 42 crore in FY22 and Rs 203 crore in FY23.
According to data platform Statista, digital lending is one of the fastest growingfintech segmentsin India which has grown exponentially from $9 billion in 2012 to nearly $150 billion in 2020 and is estimated to be worth $350 billion by 2023. Another report by IIFL Infotech earlier this year pegged India’s digital lending market to be reaching $515 billion by 2030.
Meanwhile, after warning banks and NBFCs against a possible crisis in the unsecured loan segment, the Reserve Bank of India last month raised the risk weights on personal loans, loans to NBFCs and credit cards. The move will likely see a jump in lending rates and slower growth in these segments, FE had reported.
Subscribe to Financial Express SME (FE Aspire) newsletter now: Your weekly dose of news, views, and updates from the world of micro, small, and medium enterprises