MSME-focused fintech startup NeoGrowth closes Rs 300 Cr Series D round led by FMO

by · December 15, 2022

NeoGrowth, the Mumbai-based MSME-focused digital lender, on Thursday said it raised Rs 160 crore from FMO, the Dutch Entrepreneur Development Bank.

Existing investors also participated in the round, taking the total amount raised in the Series D round to around Rs 300 crore.

NeoGrowth is backed by investors including Omidyar Network, Lightrock, Khosla Impact, Accion Frontier Inclusion Fund – Quona Capital, IIFL Seed Ventures Fund, WestBridge and Leapfrog Investments.

The fintech startup intends to use the funds to expand into new markets, strengthen its foothold in existing ones and accelerate innovation.

“We believe this fresh funding from FMO will enable us to accelerate our growth by leveraging our robust business model,” said Arun Nayyar, Managing Director and CEO, NeoGrowth. “We are confident that we will enable more small business owners – historically denied formal credit – to fuel their growth ambitions with our financially inclusive lending solutions.”

Founded by Dhruv Khaitan and Piyush Khaitan a decade ago, NeoGrowth offers loans to small businesses based on the collateral of their digital transactions and cash flow to assess the health of the business.

The company has Rs 1,600 crore in assets under management (AUM). It has tied up with over 1.5 lakh MSMEs since its inception and disbursed over $1 billion in loans.

NeoGrowth has been profitable for the past four consecutive quarters driven by a product suite, data-driven warranty model, deep customer connection, strong data science capabilities and analytical models across the value chain, a press release said.

“We invested in NeoGrowth not only because they are a driver of financial inclusion by serving an underserved SME community through their unique digital products and underwriting capabilities, but also because they fit perfectly with our ambitions to reduce inequality in a key market like India ,” said Peter Maila, Co-Chief Investment Officer, FMO.

NeoGrowth’s lending activities also focus on the financial inclusion of first-time entrepreneurs, women business owners and underserved small businesses.

The fintech startup offers technology-led, fast and hassle-free loans to MSMEs across 70+ segments, from humble neighborhood kirana stores to upcoming eateries, to posh salon operators across 25+ locations in India.