NeoGrowth, a non-banking finance company with a focus on micro, small and medium enterprises (MSMEs), on Tuesday said it has secured debt funding of $10 million (around Rs 81 crore) from US-based global investment firm MicroVest Capital Management.
The company plans to deploy the fresh proceeds to expand its India’s geographical footprint while aiming to secure more growth capital.
“NeoGrowth is dedicated to funding India's small businesses by using the digital payments ecosystem. The funding will be used to help the growth of MSMEs and integrate them into the mainstream financing ecosystem,” said Arun Nayyar, managing director and chief executive at NeoGrowth.
Mumbai-based NeoGrowth was co-founded by Dhruv Khaitan and Piyush Khaitan. It claims to have connected with over 1,50,000 micro, small and medium enterprises (MSMEs) since its inception and disbursed around $1 billion in loans.
The decade-old startup offers loans to small businesses, based on underwriting of their digital transactions and cash flow to assess the health of the business. Its lending activities also focus on the financial inclusion of first-time entrepreneurs, women business owners, and underserved small businesses. It offers loans to MSMEs across multiple segments and has a presence at around 25 locations in India.
NeoGrowth is also backed by investors, namely FMO, Omidyar Network, Lightrock, Khosla Impact, Accion Frontier Inclusion Fund – Quona Capital, IIFL Seed Ventures Fund, WestBridge and Leapfrog Investments.
MicroVest is an asset manager that specializes in allocating private debt capital to responsible financial institutions that lend to unbanked or underbanked borrowers or small businesses in emerging and frontier markets.
In November 2022, NeoGrowth secured $20 million (around Rs 160 crore) from the United States International Development Finance Corporation (DFC) via the external commercial borrowing (ECB) route.