Finova Capital Seeks To Raise INR 800 Cr In A Mix Of Primary & Secondary Deal

SUMMARY

The round will be led by new investors Avataar Venture Partners, Madison India Capital and Belgium investment fund Sofina

Founded in 2015, Finova Capital is a non-banking financial company that offers MSME business loans and home loans, with a focus in semi urban and rural areas

In FY24, the fintech startup posted a consolidated profit after tax (PAT) of INR 151.5 Cr and an operating revenue of INR 529.3 Cr

Jaipur-based fintech startup Finova Capital is reportedly in advanced stages of discussion to raise INR 800 Cr (around $95.3 Mn) from new and existing investors in a mix of primary capital infusion and secondary share sale.

The round will be led by new investors Avataar Venture Partners, Madison India Capital and Belgium investment fund Sofina, with participation from existing investors, Moneycontrol reported, citing sources.

Queries sent to Mohit Sahney, cofounder of Finova Capital, did not elicit any response till the time of publishing this article.

Founded in 2015 by the husband-wife duo of Mohit Sahney and Sunita Sahney, Finova Capital is a non-banking financial company that offers MSME business loans and home loans (backed by immovable property), with a focus in semi urban and rural areas.

The ticket size of these loans range from INR 3 Lakh to INR 25 Lakh.

The company has a presence in 16 states, including Rajasthan, Madhya Pradesh, Chhattisgarh, Karnataka, Andhra Pradesh, Telangana, and Himachal Pradesh, with a branch network of over 400.

Finova Capital last raised $65 Mn from Norwest Venture Partners, Maj Invest and Faering Capital in 2022.

Prior to that, Finova raised around INR 260 Cr from existing investors Peak XV Partners (erstwhile Sequoia Capital India) and Faering Capital in 2020.

Finova Capital posted a consolidated profit after tax (PAT) of INR 151.5 Cr in the financial year 2023-24 (FY24), up 71% from 88.4 Cr in the preceding fiscal year.

Revenue from operations zoomed 59% to INR 529.3 Cr in FY24 from INR 332.6 Cr in FY23.

This comes at a time when NBFCs, especially targeted at the under-served MSME sector, are attracting significant investor interest. For instance, in June, lending tech startup Aye Finance raised a debt funding of INR 250 Cr (around $30 Mn) from Dutch entrepreneurial development bank FMO.

The same month, Arthan Finance also raised INR 50 Cr in its Series B funding round led by Incofin India Progress Fund.

Last month, fintech startup FlexiLoans secured a debt funding of INR 75 Cr (around $9 Mn) from JM Financials through private placement of non-convertible debentures (NCDs).

Recently, it was also reported that InCred group CFO Vivek Bansal has quit the fintech firm to float his own NBFC venture, Saarathi Finance.

According to Inc42 analysis, the Indian lending tech market is poised to reach a market size of $1.3 Tn by 2030.