FlexiLoans, a digital lending platform specializing in financing for Micro, Small, and Medium Enterprises (MSMEs), has successfully raised ₹375 crore in its Series C funding round. This round was led by existing investors Fundamentum, Accion Digital Transformation, Nuveen, and Maj Invest, with new participation from British International Investment (BII), the UK’s development finance institution.
FlexiLoans’ Series C Funding: A Significant Milestone
The recent ₹375 crore capital infusion comprises both primary equity to support operational growth and secondary transactions to provide liquidity for existing investors. This follows a ₹290 crore investment in September, bringing the total funds raised to ₹665 crore over the past six months. Previous investors include Sanjay and Falguni Nayar, MAJ Invest, Fasanara Capital, and several family offices led by former banking executives.
Deepak Jain, Co-founder of FlexiLoans, stated, “This funding will help in advancing our mission of fueling the growth of Micro, Small, and Medium Enterprises (MSMEs) across India, driving financial inclusion and opening new economic opportunities.”
Expansion Plans and Technological Advancements
The newly acquired funds are earmarked for expanding operations, enhancing product development, and strengthening technology infrastructure. FlexiLoans plans to increase its assets under management (AUM) from the current ₹2,300 crore to ₹10,000 crore over the next three years, setting the stage for a potential initial public offering (IPO). (thehindubusinessline.com)
Founded in 2016 by Deepak Jain, Ritesh Jain, and Manish Lunia, FlexiLoans operates a digital lending platform focused on enabling MSMEs to access financing solutions. It provides term loans ranging from ₹2 lakh to ₹25 lakh and supply chain financing with limits between ₹25 lakh and ₹10 crore. The company leverages a proprietary tech stack and partnerships with over 25 lending institutions to offer tailored credit products designed to reach a wider MSME audience, thereby boosting capital access and driving financial inclusion across the country.
Impressive Growth Metrics
To date, FlexiLoans has disbursed over ₹10,000 crore in loans across more than 2,100 towns and cities, with an AUM exceeding ₹2,300 crore and a compound annual growth rate (CAGR) of 83% between FY22 and FY25. The company has extended over 170,000 loans to more than 50,000 MSMEs, 66% of which are located in Tier II, III, and smaller towns.
Jain highlighted the challenges and opportunities in focusing on Tier II and III cities: “A primary challenge is the limited access to formal credit from traditional banks for these underserved businesses, often due to a lack of collateral and formal credit histories. However, the opportunity lies in a vast untapped market eager for credit, the ability to leverage widespread digital adoption for 100% online loan origination and rapid approvals (within 48 hours), and the use of proprietary machine learning and alternative data to assess creditworthiness without traditional collateral.”
Strategic Partnerships and Future Outlook
FlexiLoans has established partnerships with major e-commerce and payments platforms like Flipkart, Amazon, Paytm, and PhonePe, enabling seamless loan origination within these ecosystems. This strategic approach allows the company to reach a broader MSME audience and provide customized credit solutions.
Srini Nagarajan, Managing Director and Head of Asia at British International Investment, expressed support for FlexiLoans’ mission: “We are delighted to support FlexiLoans in their mission to empower MSMEs across India with its innovative digital-only model. Financial inclusion is a key part of our strategy, and this investment underscores our commitment to supporting underserved businesses and entrepreneurs.”
Unitus Capital served as the exclusive advisor for the transaction.
FlexiLoans’ recent funding round marks a significant milestone in its journey to transform MSME lending in India. By scaling operations and enhancing its technology, the company is well-positioned to make a substantial impact on the financial inclusion landscape, providing critical support to the backbone of India’s economy.
