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Kinara Capital raises Rs 380 cr from two new investors led by Nuveen Impact Fund

By Beena Parmar

  • 19 Apr 2022
Kinara Capital raises Rs 380 cr from two new investors led by Nuveen Impact Fund
Credit: Thinkstock

Small business lender Kinara Capital has raised Rs 380 crore (around $50 million) from two new global investors led by Nuveen Global Impact Fund, along with Dutch investor Triple Jump, the company announced on Tuesday. 

“This new equity investment will lead to Kinara’s expansion of products and services to meet the rapidly increasing MSME credit demand in India,” the company said in a statement.

This takes the Bengaluru-based fintech firm’s total equity fundraise to $80 million since inception in 2011, said Hardika Shah, Founder and CEO at Kinara Capital.

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With the latest equity round, Kinara Capital gains two new members on its Board of Directors in Nuveen's Managing Director & Co-Head of Private Equity Impact, Rekha Unnithan, and Nuveen’s Director of Private Equity Impact, Stephen Lee.  

Triple Jump will be part of the board observer.

“This fresh equity round will energise us to scale faster so that we can continue doing what we do best, which is to bring more small business entrepreneurs into the fold of financial inclusion,” Shah added.

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Edelweiss Wealth Management was the advisor for this latest funding deal.

The funding comes from Nuveen's Global Impact Fund that focuses on “transformative companies’ impact value chains for low-income consumers” and from the ASN Microkredietfonds, a listed and regulated Dutch microfinance fund advised by Triple Jump.

Last year, Nuveen, the $1.3 trillion global investment manager of Teachers Insurance and Annuity Association of America (TIAA), also invested in microfinance institution Annapurna Finance.

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“Taking a digital-first approach without compromising on human customer service, Kinara has outclassed others with its ability to address the pain points of MSMEs in India. With a decade worth of proprietary data, Kinara has perfected its qualification processes and turnaround time,” said Rekha Unnithan, Managing Director & Co-Head of Private Impact Investing, Nuveen.

Founded by Shah more than a decade ago, Kinara is a non-banking financial company (NBFC) operated by Visage Holdings and Finance Pvt. Ltd.

Classified as an ESG Impact Fund by the European Union, Kinara Capital had last raised Rs 70 crore from Invest in Visions GmbH (IIV) in October 2021.

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In May 2019, the NBFC had raised Rs 100 crore ($14.3 million) from Gaja Capital, GAWA Capital, the Michael and Susan Dell Foundation and Patamar Capital.

The fintech lender, which offers collateral-free unsecured loans in the range of Rs 1-30 lakh, aims to double its assets under management (AUM) by next year from the current Rs 1,400 crore, Shah told VCCircle.

The company also said Kinara Capital aims to grow increase its branches to 125 by March end from 110 and business by 500% by 2025 with plans to disburse Rs 10,000 crore of MSME business loans in the next three years.

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With a disbursement of over Rs 160 crore a month at present, it has disbursed a total of Rs 3,000 crore across more than 75,000 business loans to the underserved small business entrepreneurs in India.

Currently, Kinara’s products include loan offerings of asset purchase loan for new or used machines, long-term working capital loan, and bill discounting loan to support ongoing needs such as shop renovations, purchase of stock or raw materials, machine repair, hiring of seasonal help, or related business growth requirements of a small business.

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