Fintech Startup Kinara Capital Closes $24 Mn Equity Funding Round

Fintech startup Kinara Capital has closed a $24 Mn (about INR 200 Cr) equity funding round led by UK-based development finance institution British International Investment.

Existing investors Nuveen and Triple Jump’s AMP fund also participated in the funding round. Edelweiss Financial worked as an exclusive advisor for the transaction. 

The development comes months after Kinara secured $46.9 Mn from Nuveen Global and Triple Jump in an equity financing round.

Founded in 2011 by Hardika Shah, the Bengaluru-based fintech startup offers collateral-free business loans ranging between INR 1 Lakh and INR 30 Lakhs to medium and small-sized enterprises (MSMEs) via its online app myKinara.

Kinara claims to have disbursed INR 3,500 Cr worth business loans to 300 MSMEs so far. It further asserts to become an RBI-registered NBFC.

“Women-led fintech company Kinara champions female empowerment and provides easier access to capital for small entrepreneurs across India. The British Government is proud to support the company through BII’s investment,” said Alex Ellis, British High Commissioner to India. 

Kinara said that its app can disburse business loans to small entrepreneurs within 24 hours. It further added that it has 125 offices in more than 100 cities of India and currently has a headcount of over 1600 employees. 

The startup aims to disburse loans to more than 200K MSMEs in the next three years. Its cap table includes Gaja Capital, GAWA Capital, Michael & Susan Dell Foundation (MSDF), and Patamar Capital, among others.

“We are honored to onboard British International Investment as our latest equity investor. The combined expertise and capital infusion from BII, Nuveen and Triple Jump, will expand Kinara Capital’s offerings to meet the rising demand of the MSME sector in India,” Shah said.

The startup will use funds to offer credit to MSMEs in India thereby, contributing to employment generation. It will further deploy funds to achieve a 5x growth by 2025 and attain an asset under management (AUM) of INR 6000 Cr.  

It also claims to be adhering to ESG standards for some financial providers including International Finance Corporation Performance Standards (IFC PS), Client Protection Pathway (CPP) and United Nations Women Empowerment Principles (UN WEP).

In the fintech sector, it competes with the likes of Aye Finance, Sachin Bansal-led NAVI and CredAvenue, among others.  

According to an Inc42 report, the Indian fintech space will expand at a CAGR of 13% to become a $1.3 Tn market by 2025. Of this, lendingtech is a subsector that will capture 47% of the market share in the overall fintech sector.