Prayaan Capital raises Rs 110 crore in Series A led by Peak XV

funding

• Prayaan Capital raised Rs 110 crore in Series A from Peak XV Partners
• Funds will help build a tech-led lending platform for MSMEs
• Prayaan to boost credit access for underserved small businesses

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Prayaan Capital has raised Rs 110 crore in a Series A funding round led by Peak XV Partners, as the newly acquired MSME lender looks to build a technology-led lending platform and expand credit access to underserved small businesses in India.

Chennai-based Prayaan Capital, led by Rangarajan Krishnan, former joint managing director and CEO of Five-Star Business Finance, plans to use the capital to build its lending platform, expand its team, and increase its presence across key MSME markets.

Krishnan recently acquired a controlling stake in Prayaan Capital and aims to position the company as a technology-enabled lender combining on-ground underwriting with digital tools across sourcing, underwriting, and collections.

“Small businesses are the backbone of India’s economy, yet millions remain underserved by formal credit. Prayaan Capital is built on the belief that combining deep customer understanding with technology can meaningfully expand access,” Krishnan said.

“I am grateful to partner with Peak XV, who have been long-term believers in this segment and have supported me through multiple chapters of my journey," he added.

The funding comes at a time when MSMEs face an estimated $300 billion credit gap, creating opportunities for fintech lenders focused on digital underwriting and distribution.

Peak XV Partners said its investment builds on its long association with Krishnan, including his tenure at Five-Star Business Finance.

“We have known Ranga for over 15 years, and our partnership has been shaped by a shared commitment to expanding access to credit for small businesses,” said GV Ravishankar, managing director at Peak XV Partners. “Having seen firsthand the impact they created at Five-Star, we are excited to partner with them from day one as they build Prayaan Capital.”

India has about 70 million MSMEs employing nearly 300 million people, but many continue to face limited access to formal credit, creating growth opportunities for new-age lenders.