NeoGrowth Credit Pvt. Ltd, a small and medium enterprises-focused fintech lender, has raised $17 million (Rs 120.8 crore) in debt financing from France’s Proparco SA.
The funding will help NeoGrowth reach out to 28,000 small businesses in the next five years, the companies said in a statement.
Proparco, the private-sector financing arm of French development finance institution Agence Francaise de Development, said reaching out to small businesses is in line with its commitment to supporting access to finance, in particular of MSMEs, and innovative actors in developing economies.
NeoGrowth, a non-banking financial company that doesn’t take deposits, was founded by serial entrepreneurs Dhruv Khaitan and Piyush Khaitan in 2012 after they sold their transaction processing firm Venture Infotek.
The company had last raised equity funding, of Rs 300 crore ($47 million), in January last year in a round led by LeapFrog Investments. Existing investors Aspada Investment Company and Quona Capital also contributed to the fundraising.
NeoGrowth had first raised external funding in July 2013 from impact investment firm Omidyar. Eight months later, the NBFC raised Rs 10 crore ($1.62 million) from Aspada.
In April 2015, NeoGrowth raised an undisclosed amount of funding led by Silicon Valley-based social venture investor Khosla Impact.
A string of deals have happened in the digital lending segment this year.
In July, VCCircle reported multi-stage investor Sequoia Capital led the first institutional investment round in Delhi-based Progcap, which provides debt to micro and small businesses.
In June, online lending platform Biz2Credit Inc. raised $52 million in a Series B funding round led by private equity firm WestBridge Capital.
In June, Matrix Partners invested more in online lending platform Avail Finance while in February SAIF Partners led a Series B investment in Ziploan.
Proparco has been investing in India for a decade via both debt and equity deals. The firm has made equity investments in Azure Power Global Ltd, NSL Renewables Power Pvt. Ltd and Simpa Energy India Pvt. Ltd.
It also has invested in two funds of Lok Capital, Rabo Equity Advisors’ India Agri Business Fund II and a fund managed by Aavishkar Venture Management Pvt. Ltd.