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HomeTechFinancial services firm Finova Capital bags $65 million in funding from Norwest,...

Financial services firm Finova Capital bags $65 million in funding from Norwest, others


Mumbai: Non-banking financial company Finova Capital has raised $65 million from Norwest Venture Partners, Maj Invest and Faering Capital, a senior company official said. The micro, small and medium enterprises or MSME-focused lender will use the funds to grow its loan book, invest in technology, expand geographically and further its vision of enabling financial inclusion at scale.

Of the total capital, Norwest Venture (NVP) brought in $45 million, with the rest coming from other new and existing investors.

In 2020, the company had
raised $35 million from investors led by Sequoia Capital.

The Jaipur-based firm addresses customer segments like micro entrepreneurs and semi-skilled professionals who do not have or have limited access to lending from formal financing institutions. The loans are tailored to the needs of its target segment of small service providers, manufacturers and retailers.

Founded in 2016 by Mohit Sahney and Sunita Sahney, Finova Capital has 180 branches spread across 8 states in west, north and central India. It has 20,000 plus customers and more than Rs 1,000 crore loan book. “ Finova continues to expand to its neighbouring regions, utilizing and building on its internal domain knowledge and processes,” a company statement said.

Finova is backed by 34 banks, NBFCs and AIFs.

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“We continue to invest heavily in our tech capabilities and operations to further improve our goal to help realize the dreams of millions of small entrepreneurs over the next decade. Our processes combined with disciplined underwriting has ensured our resilience to the pandemic while keeping the growth and portfolio quality intact,” said Mohit Sahney, founder and CEO of Finova.

“Finova has demonstrated best-in-class asset quality, having built a solid underwriting framework with the use of tech and data analytics and has built a low cost, diversified liability franchisee in North, West and Central India,” said Niren Shah, managing director and head of NVP India.

According to a November 2021 report by Crisil, after weathering multiple challenges over the past three fiscals, assets under management (AUM) of non-banking financial companies (NBFCs) is set to grow 8-10% next fiscal, riding on two tailwinds — improving economic activity, and strengthened balance sheet buffers.

“We believe in Finova’s ability to grow profitably while also creating a significant impact,” said David Paradiso, partner at Maj Invest.

“As early investors in Finova Capital, we have had the opportunity to witness the company’s strong growth in the last three years..,” said Aditya Parekh, cofounder and managing director at Faering Capital.

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