Small enterprise financing firm Vistaar raises $7.2M from Lok Capital, Omidyar, Elevar & SVB

Bangalore-based Vistaar Financial Services Pvt Ltd, a small enterprise financing firm, has raised $7.2 million (Rs 40 crore) in Series B funding from Lok Capital and Omidyar Network besides existing investors Elevar Equity Advisors and SVB India Capital Partners. Vistaar caters to the underserved market of small and micro enterprises (MSMEs), estimated to comprise over 26 million companies.

This is the first investment by Lok Capital and Omidyar in the small enterprise financing segment.

The funds raised will be utilised to expand Vistaar’s current network to 180 branches across the country over the next four years, with a projected portfolio of over Rs 1,600 crore.

In May 2010, the company raised a Series A round of Rs 15 crore from Elevar Equity Advisors and SVB India Capital Partners.

Commenting on the current round of funding, Vistaar’s MD & CEO Brahmanand Hegde and founder-director & COO Ramakrishna Nishtala said in a statement, “Our sector-specific approach helps us to make more informed credit decisions, even as we fully meet the needs of our small business customers. With this new round of fundraising, we can scale the business more rapidly.”

Founded in April 2010, Vistaar claims to have built a unique credit methodology to undertake cashflow-based assessment of MSMEs even in the absence of conventional income documents and assesses their economic activities. It typically puts in Rs 30,000-Rs 20 lakh in portfolio firms. The company has also set up a robust technology platform and operational processes for its branches to ensure a highly scalable model.

Ash Lilani, managing partner and co-founder of SVB India Capital Partners, and Sandeep Farias, managing director of Elevar Equity, said, “We have worked with the company since its inception and are delighted to be backing such a high quality team. The company’s ability to attract significant amounts of capital from its startup days in 2010 has validated the entrepreneurial vision and execution abilities of its leadership.”

Vishal Mehta, co-founder and partner of Lok Advisory Services, and Badri Pillapakkam, principal of Omidyar Network India Advisors, said in a statement, “We recognise the importance of innovative credit and individual lending to the informal segment. We believe Vistaar’s approach of customised and specialised financing is a much-needed and more sustainable solution to serve this segment.”

(Edited by Sanghamitra Mandal)