NeoGrowth Bags $10 Mn Debt Funding To Offer More Credit To Businesses

RBI-recognised non-banking financial company (NBFC) NeoGrowth has secured $10 Mn as debt investment from US-based MicroVest Capital Management.

The fresh capital will support NeoGrowth to extend financing to small businesses and also, use it as the required growth capital for the company.

The development comes almost a month after NeoGrowth secured INR 300 Cr equity funding from the Dutch entrepreneurial development bank FMO and other existing investors. 

Set up in 2013 by Dhruv Khaitan and Piyush Khaitan, NeoGrowth offers tailored credit solutions to small and medium-sized businesses across 70+ segments.

It claims to have disbursed over $1 Bn to more than 1.5 Lakh small and medium-based businesses to date.  

“NeoGrowth is dedicated to funding India’s small businesses by leveraging the digital payments ecosystem. This support from MicroVest will allow us to continue making a positive impact on SMEs. The funding will be used to help accelerate the growth of MSMEs and integrate them into the mainstream financing ecosystem,” said Arun Nayyar, managing director and CEO of NeoGrowth.

In November 2022, it received $20 Mn funding from the US-based financial institution Development Finance Corporation (DFC). 

Earlier, it asserted that it has managed more than INR 1600 Cr assets under management (AUM).

“NeoGrowth’s digitally-enabled lending model will allow the company to reach more small businesses across India with greater efficiency. This expanded reach will help promote financial inclusion and economic growth for more underserved micro entrepreneurs and SMEs,” said Joshua Moraczewski, CEO of  MicroVest.

It counts Omidyar Network, Lightrock, Khosla Impact, Quona Capital, IIFL Seed Ventures Fund and Leapfrog Investments, among others as its investors.

ftcash, Cars24 and Mufin Finance, among others are some of the NBFC companies operating in this space.

As per the RBI’s data, more than 9,400 registered NBFCs are operating in the country as of January 2022.

Interestingly, the country’s NBFC segment has caught the attention of various startups players. Several startups including Razorpay, PhonePe and BharatPe, among others had earlier applied for NBFC licences with RBI. 

However, in November 2022, the central bank showed reluctance in granting NBFC licences to fintech players due to various reasons such as capital inflows, ownership (of these fintech startups) and steep high-interest rates levied by them. 

Note: We at Inc42 take our ethics very seriously. More information about it can be found here.