Fintech Startup Flexiloans Raises $75 Million With Goal Of Aiding MSMEs
Based on two sources, Sanjay Nayar-backed small business-focused fintech startup Flexiloans.com is set to raise $75 million to expand its books for micro, small, and medium enterprises at a faster rate.
"The company is looking to raise new funding and has begun preliminary talks with investors," one of the two people said on condition of anonymity. The process has been overseen by investment bank Unitus Capital.
According to the second source, preliminary discussions have taken place with growth-stage venture capital and private equity funds including Westbridge Capital, Lightspeed Venture Partners, and Steadview Capital. "It is considering raising primary capital." Existing investors are also expected to take part."
MAJ Invest, Fasanara Capital, and the family offices of Yogesh Mahansaria and Harry Banga invested $90 million in the firm in a Series B round in 2022. So far, it has raised approximately $100 million in debt and equity. The company was founded by Sanjay and Falguni Nayar.
Flexiloans, founded in 2016 by Deepak Jain, Ritesh Jain, Manish Lunia, and Abhishek Kothari, provides 100% digital loans and a buy-now-pay-later product for MSMEs. According to the company, it has access to over 10 million SMEs through 150+ partners, including Flipkart, Amazon, Pine Labs, and Paisabazaar. It manages 1,050 crore in assets and has disbursed over 70,000 loans totaling over 3,400 crore. It intends to reach an AUM of 10,000 crore by the end of 2025.
The company primarily lends to businesses in Tier II and III cities (69% of total loans). Almost 53% of loans are made to SMEs seeking to borrow for the first time.
A Flexiloans spokesperson stated, "FlexiLoans.com is growing at a very steady pace, we are under leveraged at the moment, and thus the current capital base can comfortably support our growth." Our debt-to-equity ratio is also a healthy 1:1. We have ongoing conversations about growth plans with our various stakeholders as part of the process."
Dr. V Anantha Nageswaran, the Indian government's chief economic advisor, stated last year that the lending potential of Indian MSMEs could reach $3 trillion by FY23. According to the MSME Ministry, the sector contributes approximately 30% of India's GDP, 45% of India's exports, and is the second largest employer of labour after agriculture. According to Nageswaran, India is one of the fastest growing fintech markets, with a market size of $31 billion in 2021 expected to grow to $1 trillion by 2030, providing significant growth opportunities for both strategic and financial investors.