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Jaipur-based Finova raises Series A funding from Sequoia Capital

12 September, 2017

Jaipur-based non-banking financial company Finova Capital Pvt. Ltd has raised an undisclosed amount in a Series A round from Sequoia Capital India Advisors Pvt. Ltd.

This was the first round of external funding for Finova, which had started off with a capital of Rs 10 crore, besides a term loan of Rs 30 crore, in 2015.

The company, which claims to have disbursed about Rs 45 crore to over 500 small businesses so far, currently operates five branches in Rajasthan. It plans to use the fresh capital to open 10 more branches across the country by the end of 2017-18.

“Finova Capital is addressing a critical need-gap. It offers credit to small businesses with undocumented income through their innovative credit models. Sequoia is delighted to partner with the team,” said GV Ravi Shankar, managing director, Sequoia Capital India Advisors.

Founded in 2015 by husband-wife duo Mohit and Sunita Sahney, Finova lends to the financially-excluded small-time manufacturers, handymen and service providers, such as electricians, plumbers and carpenters, besides paanwalas, milkmen, laundrymen and hairdressers. It offers loans of Rs 8-9 lakh for up to seven years and charges an annual interest of 21-25%.

“A large chunk of India’s MSME market falls into the services sector. And this is the segment we cater to – those who do not have access to capital due to lack of formal documentation, financial literacy or presence of mid-level players,” said Finova founder and CEO Mohit Sahney, a 17-year banking industry veteran, who earlier led the mortgage business of ICICI Bank in Mumbai and head its Rajasthan operations.

“We currently work with 10 lenders and are looking to explore new partnerships to expand our lending portfolio,” he said, adding that the company was profitable from the first year and expects to end its second year of operations with Rs 100 crore in assets under management.

The financial sector in India has gained a lot of traction in recent years with several players entering the payments, lending, insurance and personal finance space. In the fin-tech space, too, at least 25 startups have raised funding between January and May this year, according to a VCCircle analysis.

Recently, Shubh Loans had raised $1.5 million in a pre-Series A round from SRI Capital, Japan’s BeeNext and Pravega Ventures.

KNAB Finance Advisors Pvt. Ltd had raised a little over Rs 2.5 crore in two rounds from InCred, besides a dozen other individual investors. InCred has also invested in fin-tech startup DigiLend Analytics and Technology Pvt. Ltd.

In July, Bengaluru-based Billionloans Financial Services had raised $1 million in seed funding from Reliance Corporate Advisory Services Ltd, a wholly-owned subsidiary of Reliance Capital Ltd.

In June, Delhi-based digital lending platform Stashfin had raised $5 million in a pre-Series A round from Kirloskar Group’s venture capital arm Snow Leopard Ventures, Singapore-based Alto Partners, GrowX Ventures, and a clutch of angel investors. The same month also saw Ahmedabad- and Bengaluru-based Lendingkart raise Rs 50 crore in debt from Yes Bank.

Around the same time, online peer-to-peer lending platform LoanMeet had also secured seed funding from a clutch of investors, including Chinese entrepreneurs. Other fin-tech startups that have raised funds include LoanTap, Innoviti, Fincash, MoneyTap, Loan Frame, and Ftcash.

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Jaipur-based Finova raises Series A funding from Sequoia Capital

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