MSME-focused digital lending platform FlexiLoans has secured Rs 290 crore in its Series C equity funding round led by global investors Accion, Nuveen (the investment manager of TIAA), and Fundamentum, along with existing backer Maj Invest.
The round included a mix of primary and secondary transactions.
The Mumbai-based NBFC-fintech firm plans to use the fresh capital to expand its operations, enhance product offerings, and strengthen its technological infrastructure.
Founded in 2016 by Deepak Jain, Ritesh Jain, and Manish Lunia, FlexiLoans focuses on MSMEs that are often excluded from traditional lending systems due to a lack of conventional credit history. Through its in-house NBFC, Epimoney Private Limited, and integrations with over 20 lenders, the platform provides working capital loans ranging from Rs 2 lakh to Rs 25 lakh, alongside supply chain finance with limits between Rs 25 lakh and Rs 10 crore.
Since its inception, FlexiLoans, which turned profitable in FY23, claims to have disbursed over 1 lakh loans worth Rs 7,000 crore, with Rs 3,000 crore disbursed in FY24 alone, across more than 1,500 cities.
As of June 30, the firm’s assets under management (AUM) stood at Rs 1,817 crore, up from Rs 1,067 crore as of March 2023.
About 54 percent of FlexiLoans borrowers are first-time business loan recipients, and 70 percent of its loans are to MSMEs in Tier 2 and Tier 3 cities. According to a note by Crisil Ratings, the company maintains a net worth of Rs 294 crore.
This latest infusion brings FlexiLoans’ total equity funding to Rs 636 crore and its debt financing to over Rs 2,000 crore, including a $90 million Series B round in June 2022 from Fasanara Capital, Maj Invest, Caravel Group, and others.
"Our focus remains on MSMEs, particularly small traders, wholesalers, sole proprietors, and retailers in Tier 2 and Tier 3 cities," Deepak Jain, who had co-founded the company, told Moneycontrol. "These underserved markets are where we see the most growth, especially in sectors like FMCG, consumer electronics, pharmacy, and fashion, which make up 60-70 percent of our business."
The funding round comes at a time of increasing investor interest in fintech NBFCs, particularly those addressing the credit needs of under-served MSMEs.
These fintech NBFCs leverage advanced technology to offer financial services, benefiting from improved regulatory clarity around digital lending and NBFC operations. According to a Crisil report, the MSME credit gap was estimated at Rs 92 trillion as of fiscal 2023, with less than 10 percent of the 70 million MSMEs accessing formal credit.
“We aim to reach a loan book of Rs 5,000 crore, combining supply chain finance and term loans," he added. The group operates on a branchless business model, with digital processes from loan origination to disbursement, and partners with digital players like Amazon, Flipkart, Paytm, and PhonePe, as well as aggregators like Paisabazaar, to reach MSMEs on these platforms.
Nethra Bhat, Partner, Asia at Accion Digital Transformation, commented, “FlexiLoans is connecting MSMEs across India to working capital so they can better serve their customers. They understand the Indian digital MSME space and their customers’ needs, and have built a strong tech platform.”
Radhika Shroff, Managing Director of Impact Investing Private Equity at Nuveen, emphasised the potential in India's 60 million small businesses in need of working capital, stating, "FlexiLoans provides a commercial and proven solution by offering a differentiated digital delivery and underwriting model to scale financial inclusion, particularly in underserved Tier 2 and Tier 3 cities."
Echoing this sentiment, Mayank Kachhwaha, Principal at Fundamentum, praised FlexiLoans for its strong execution, high-quality team, and focus on profitable growth.
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