NBFC Kogta Financial raises $148 mn from Canada's Ontario Teachers Pension Plan in Series E round

NBFC Kogta Financial raises $148 mn from Canada's Ontario Teachers Pension Plan in Series E round

Vehicle financier Kogta Financial has raised $148 million in a Series E funding round from the Ontario Teachers’ Pension Plan, giving the Canadian pension fund a significant minority stake in the Jaipur-based non-bank lender, the company said.

Moneycontrol was the first to report the fund raise earlier on June 26.

The funds raised will be used as primary capital to drive growth across the firm's product offering and expand regional presence and will also provide partial exits to Kogta’s existing institutional investors Morgan Stanley Private Equity Asia and Creador. Kogta is also backed by private equity firm Multiples Alternate Assets Private Ltd

As part of the investment, Rahul Mukim, Director, Private Capital, India is slated to join the board of Kogta as the nominee of Ontario Teachers’ Pension Plan. Kotak Investment Banking was the financial advisor for the transaction, the official announcement added.

Speaking on the fund raise, Arun Kogta, MD and CEO of Kogta, said, “This is a significant milestone for the Company, and we are pleased to welcome aboard Ontario Teachers’. Their experience would help Kogta navigate the next phase of its growth journey, deepening its reach across chosen geographies and product segments. We believe the Investment by Ontario Teachers’ is a stamp of confidence for the underlying business model built over the years”

Deepak Dara, Senior Managing Director and Head of India for Ontario Teachers’ said, “Our investment in Kogta underscores our commitment to identifying and backing high-growth opportunities in India’s vibrant financial services sector. The used vehicle and livelihood financing segment is significantly underpenetrated, and Arun and Varun have built a scalable business model with a strong focus on asset quality, deep technology orientation, and talent. We are excited to partner with them to further accelerate their growth trajectory.”

Cindy Yan, Senior Managing Director, Private Capital, Asia-Pacific, for Ontario Teachers’ added, “Financial services and non-banking lending financial services are global focus sectors where we have significant expertise. We are pleased to support Kogta Financial in its mission to provide financing solutions to the underserved vehicle and MSME sectors in India. This investment aligns with our strategy of supporting strong management teams in high-growth businesses with a clear competitive advantage.”

Arjun Saigal, Managing Director and Co-Head of Morgan Stanley PE Asia, said, “We have been amongst the early investors in Kogta and have witnessed the Company’s evolution into one of the leading lenders in the vehicle finance space. Addition of OTPP further strengthens the cap table and is reflective of investor confidence in Kogta’s operations. While we are partially exiting our stake in the current round, we continue to be shareholders and look forward to continuing our successful partnership with Kogta in its next stage of growth.”

Started in Rajasthan in 1996, Kogta has now expanded across 10 states in India with 225-plus branches and over 5,000 employees. The company has assets under management of Rs 4,800 crore across commercial vehicles, passenger vehicles, tractors, construction equipment and MSME loans. Since its first institutional investment in October 2016, Kogta has scaled rapidly with AUM growth at 40% CAGR.