NeoGrowth, the Mumbai-based MSME-focused digital lender, on Thursday said it raised Rs 160 crore from FMO, the Dutch entrepreneurial development bank.
Existing investors also participated in the round, taking the total amount raised in the Series D round to about 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 that 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 been denied formal credit—to fuel their growth aspirations 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 underwriting 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 connected with over 1.5 lakh MSMEs since its inception and disbursed over $1 billion in loans.
NeoGrowth has been profitable for the last four consecutive quarters fueled by a product suite, data-driven underwriting model, deep customer connection, strong data science capabilities, and analytical models across the value chain, a press note said.
“We invested in NeoGrowth not only because they are a propellent of financial inclusion by serving an underserved SME community through their unique digital products and underwriting capabilities but also because they fit perfectly well within our ambitions of reducing inequalities in a key market such as 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, quick, and hassle-free loans to MSMEs across 70+ segments, from modest neighbourhood kirana stores to upcoming eateries, to chic salon operators in over 25 locations in India.