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Hyderabad-based data-driven fintech startup CredRight has raised Rs 78 crore ($9.7 million approx) in funding through a combination of equity and debt.

While Michael & Susan Dell Foundation led the equity round along with existing investors including YourNest, Spearhead Capital, 9Unicorns, and AccionVenture Lab, the debt round was led by BlackSoil, Caspian Debt, RevX Capital, and Westen Capital.

According to the company statement, CredRight will utilise the fresh capital to expand further into new locations, strengthen its technology stack, and work towards positively impacting the lives of small business owners by helping them access formal finance.

Co-founded by Neeraj Bansal and Vineet Jawa, CredRight is a data-driven lending platform that facilitates credit to small businesses and MSMEs via NBFCs and banks.

The startup is helping bridge the credit gap for SMEs that do not have access to institutional debt as commercial banks and traditional institutional lenders find it prohibitive to distribute cost-efficiently in remote locations.

“Our phygital model, unique underwriting ability, and deep understanding of nano enterprises helps us reach remote areas and provide meaningful loans whilst ensuring profitability, said Neeraj Bansal, Co-founder & CEO of CredRight.

“We are delighted to have successfully executed this fundraise in a challenging environment and welcome the support of, the Michael & Susan Dell Foundation and, of our existing shareholders,” he added.

Neeraj said the company has served more than 5,000 nano enterprises so far, and the latest fundraise will help to further extend its reach exponentially.

In 2021, the startup raised $2.7 million (approximately Rs 20 crore) from 9Unicorns , Spearhead Capital, and Venture Catalysts, along with existing investors YourNest, Accion Venture Lab, and other angels.

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“The financing gap is wider still for nano entrepreneurs, businesses with an annual turnover between Rs 1 and 10 million. These growing businesses account for approximately 20% of the MSME segment yet over 90% of them lack access to formal financing from traditional lenders. These entrepreneurs are the future of India, and Credright is creating opportunity for them, their families, and their communities across the country,” said Geeta Goel, Country Director, Michael & Susan Dell Foundation.

“CredRight has one of the lowest NPAs in the industry using its innovative underwriting model based on alternate data. With CredRight recently receiving an NBFC licence and with this round of funding, the company will be able to significantly grow its loan book exponentially,” added Sunil K Goyal, Managing Director and Fund Manager at YourNest Venture Capital.

CredRight claims to have experienced a 10x growth in its assets under management (AUM) over the past three years. The company is now targeting an AUM of Rs 2,000 crore over the next three years.