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Jaipur-based MSME-focused NBFC Finova Capital raised $135 million in a Series E funding round. The round saw participation from new investors Avataar Venture Partners., Sofina, Madison India Capital, and returning investor, Norwest Venture Partners. 

The company, in a statement, said the round offered exits to early investors. Finova Capital’s investors include Peak XV Partners, Faering Capital, and Maj Invest. It had last raised $65 million in a round led by Norwest in 2022.

The NBFC will use the capital to grow its loan book, invest in technology and expand its geographic presence. At present, Finova’s assets under management (AUM) amount to Rs 3,000 crore with a five-year CAGR of over 60%.

Founded in 2015 by Mohit Sahney and Sunita Sahney, Finova has a presence across 16 states and works with over one lakh customers. It offers working capital loans, machinery loans, and business loans, among others, to MSMEs, offering credit to micro-entrepreneurs and semi-skilled professionals through its technology-led platform. 

“We are very excited to welcome our new investors—Avataar Venture Partners, Sofina, and Madison India Capital, who share our vision of financial inclusion. Along with them, we appreciate the support from our existing investors—Peak XV Partners, Faering Capital, Norwest Venture Partners, and Maj Invest,” said Mohit Sahney, Founder and MD at Finova Capital, in a statement. 

Finova has also built a proprietary underwriting and risk-assessment technology solution targeting untapped customer profiles. 

“As Avataar’s first investment in the financial services sector, we are delighted to be partnering with Finova, which is the market leader in the MSME financing space in North, Central, and West India,” said Anirudh Singh, Partner at Avataar Venture Partners, in the statement. He added that Finova has managed to grow 7X over the last four years.

Finova competes with the likes of Kinara Capital, Indifi and other venture-backed players in the MSME-lending space. 

Bengaluru-based Unitus Capital acted as the exclusive financial transaction advisor to Finova for the round.