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Digital lending platform FlexiLoans has raised $90 million as a part of its Series B funding round from Denmark-based private equity firm Maj Invest and UK-based fintech investor Fasanara Capital. 

The family offices of Hong Kong-based investor Harry Banga and Yogesh Mahansaria (Alliance Tire Group founder) and existing shareholders, including veteran banker and deal maker Sanjay Nayar, who led KKR in India for over a decade, also took part in the round.

This investment marks Fasanara Capital’s first SME fintech investment in India and MAJ Invest’s third investment this year, the company said in a statement.

The firm plans to utilise the capital to “focus on technology development and double its loan book via its co-lending, buy-now-pay-later services (BNPL), and supply chain finance platforms”. The company said that the investment round provides it a strong runway for its growth as it comes at a time when there is a fintech push by the government, especially for the MSME sector.

“We are very excited to have institutional players MAJ Invest, Fasanara Capita, and the Banga and Mahansaria family offices join us in our mission to help small businesses grow in India. Their experience in developing global fintech companies will help us in creating better products as well as organisational building,” said Deepak Jain, Co-founder at Flexiloans.com.

The startup will also continue to invest in technology and strengthen aspects of customer automation, risk management, and analytics capabilities. 

“Our current disbursement to date is about Rs 1,700 crore and we plan to double this over the next 12 months through co-lending, BNPL, and supply chain finance platforms. The fresh capital will be used to strengthen our existing lending base and reach out to more small and underserved enterprises across 1,600 cities we serve,” he said.

Founded in 2016 by Deepak Jain, Manish Lunia, Ritesh Jain and Abhishek Kothari, the MSME-focused digital NBFC claims to be growing at a CAGR of 500 percent with over 15 lakhs registered users. 

A large portion of its loan book is generated from disbursals to small businesses in Tier 2 and 3 towns.

Flexiloans has built a co-lending platform—Bi-frost—and integrated with seven co-lenders, including Fullerton, RBL Bank, and Karur Vysya Bank. Around 55-60 percent of new loans are disbursed via the co-lending platform. It operates in the embedded finance space and provides financing to sellers or vendors of ecommerce platforms, including Amazon, Flipkart, Nykaa, Myntra, and others. 

By the end of the year, Flexiloans aims to disburse more than Rs 5,000 crore and either get a banking licence or prepare for an IPO.

This is the third fundraise by FlexiLoans. In 2016, it had raised Rs 100 crore from veteran bankers Sanjay Nayar, Anil Jaggia, and Vikram Sud. In 2020, it raised Rs 150 crore in an equity and debt funding round led by the Sanjay and Falguni Nayar Family Office. 

“India is a strong market for MSME financing and we are delighted to partner with FlexiLoans.com, which is amongst the pioneers in the digital MSME lending space in India and shares a similar commitment to Fasanara’s to reduce the financing gap for MSMEs,” said Francesco Filia, CEO of Fasanara Capital.

“Embedded financing to merchants in the ecommerce ecosystem is a sweet spot that we invest in across the world and FlexiLoans.com.com has a strong product-led partnership in India for the same,” the CEO added.