FinAGG Raises $11 Mn To Scale Up Credit Offerings For MSMEs

Fintech startup FinAGG Technologies has raised $11 Mn (INR 91.4 Cr) as a part of its Series A funding round co-led by BlueOrchard and Tata Capital Limited, with participation from Small Industries Development Bank of India and existing investor Prime Venture Partners.

The fresh capital will be deployed for expanding its offline and online presence, enhancing global outreach and driving product innovation. 

To date, the firm has raised $15.28 Mn. In 2022, FinAGG raised $3 Mn in its Pre-Series A funding round, with BLinC Invest leading the investment and participation from Prime Venture Partners.

Founded in 2020 by Nipun Kohli and R. Srinivasan, FinAGG offers credit solutions to distributors, retailers and MSMEs that are part of a brand’s supply chain. In essence, it partners with large brands and then onboards distributors, suppliers, and retailers to offer credit facilities to them. 

It provides working capital solutions to MSME from the convenience of their home. Further, it uses digital infrastructure of India to onboard and underwrite any client.

FinAGG competes with the likes of Progcap, Mintifi and LendingKart.

Kohli said, “The focus is on introducing blockchain technology to revolutionise borrower evaluation, bringing a fresh perspective and depth to the underwriting process.”

“Having the likes of BlueOrchard will help us drive the penetration of climate insurance to our client, Tata Capital, will help us scale our business operations to new heights and SIDBI, which is a development back owned by GOI, will help us grow GST Sahay through access to cheap funds,” Kohli added.

Srini Ramki, cofounder and CTO of FinAGG Technologies, said, “The funds secured will play a crucial role in expanding our reach pan India.”

According to FinAGG, the working capital industry in India has a potential of over $7.2 Bn of which only the surface has been explored. The industry will see a lot more players joining in trying to get some share of the pie but will be dominated by FinTechs who keep innovating and improving the product and making it much easier for the borrower to fund their working capital.

The startup’s audited revenue for FY 2022-23 stands at INR 12.8 Cr, with projected revenues of INR 30 Cr for FY 2023-24 and a substantial growth expectation of INR 100 Cr for FY 2024-25.

As per Inc42’s State Of Indian Fintech Report, Q3 2023, despite a 48% year-on-year decline in funding during the second quarter of 2023, the fintech sector has secured over $27 Bn in funding from 2014 to mid-2023. Looking ahead, the future of fintech appears promising, with a substantial market opportunity estimated at $2.1 Tn.