Jaipur-based non-banking financial company Finova Capital Pvt. Ltd has raised $35 million (about Rs 260 crore) from existing venture capital investors Sequoia Capital India and Faering Capital.
The company also raised an additional $20 million from various lenders, it said in a statement.
Finova said it will use the funds to expand its presence and enable access to credit for the unbanked population.
The fundraising comes a year and a half after Finova secured $15 million in a Series B round from Faering Capital and Sequoia in March 2019. Sequoia had first invested in Finova in late 2017 and then put in more money the following year.
Finova targets micro-entrepreneurs and semi-skilled professionals who typically do not have or have limited access to lending from formal financing institutions and are looking for loans of around Rs 3-5 lakhs for up to seven years.
Finova, founded in 2016 by Mohit and Sunita Sahney, has assets under management of about Rs 460 crore and has more than 11,000 customers. It is present across Rajasthan, Madhya Pradesh, Uttar Pradesh and Delhi and over 100 branches. It is also expanding to neighbouring regions.
Ishaan Mittal, principal at Sequoia, said that the credit gap for micro, small and medium-sized enterprises in India is estimated at $380 billion. “Finova is playing a significant role in bridging this gap to enable and empower these businesses which are a critical contributor to the Indian GDP and employment,” Mittal said.
Aditya Parekh, co-founder and partner at Faering Capital, said that the VC firm was “impressed” by Finova’s profitable growth, asset quality and execution over the past 18 months since its original investment.
Bangalore-based Unitus Capital acted as the exclusive financial transaction adviser to Finova. Vertices Partners and Luthra and Luthra acted as legal advisors on the transaction.