Northern Arc Capital Raises $50 Mn To Offer Customised Solutions To Businesses

Digital debt financing company Northern Arc Capital has raised $50 Mn through the issuance of non-convertible debentures from the Dutch entrepreneurial development bank FMO.

Founded in 2009, Northern Arc provides credit facilities to MSMEs, Indian households, financial institutions and emerging businesses. 

“We are pleased to once again support our longstanding partner Northern Arc Capital. Through our latest partnership with Northern Arc, we can therefore support the business development across the Indian country, in line with our updated strategy towards 2030,” said, Huib-Jan de Ruijter, chief investment officer at FMO.

Northern Arc said that its platform Nimbus helps NBFCs, fintech companies, digital lenders and investors raise debt capital from over five hundred global and domestic investors. It claims to have raised over INR 1 Tn ( Cr) from its clientele and disbursed over INR 8 Mn loans to retail customers. 

Northern Arc claims to be managing a total asset under management (AUM) of over INR 9K Cr. Its cap table includes USDFC, ADB, Proparco, Calvert Impact Capital, JICA, Sumitomo Mitsui Banking Corporation, LeapFrog, IIFL, Accion and Augusta Investments, among others. It has a presence in 28 provinces and 7 union territories of India. 

“As a pioneer in the space we work in, we have become the preferred port of call for many global DFIs. We are excited to expand this partnership with FMO to cater to the diverse financial requirements of India’s small entrepreneurs and emerging segments,” said Ashish Mehrotra, MD and CEO of Northern Arc Capital. 

Northern Arc will use half of the funds to support MSMEs and women entrepreneurs, in turn, providing them customised credit directly and via partners. 

The firm will also address three goals of UN Sustainable Development–SDG 8 (decent work and economic growth), SDG 5 (gender equality) and SDG 10 (reduced inequality).

At the moment, the global startup ecosystem is facing a multitude of problems including the funding crunch, low market sentiment, disruption in the global supply chain, market inflation and geopolitical tensions. 

Consequently, various Indian growth-stage and late-stage startups are striving for survival while early-stage startups are catching investors’ attention. Despite this, a slew of India-focussed VC funds such as Avataar Venture Partners’ $350 Mn fund, Artha Group’s micro VC fund INR 450 Cr, and SphitiCap’s $500 Mn, among others have been launched to back early and growth-stage startups.