Small business lender Kinara Capital on Friday said it has secured Rs 200 crore (around $25 million) in a financing round led by UK's development finance institution (DFI) British International Investment (BII).
The round also saw participation from existing investors Nuveen Global Impact Fund and ASN Microkredietfonds, a listed and regulated Dutch microfinance fund advised by Triple Jump.
“This new equity investment will propel Kinara to grow 5x by 2025 as it aims to reach an assets under management (AUM) of Rs 6,000 crore by accessing to formal financial inclusion via its myKinara app,” the company said in a statement.
This takes the Bengaluru-based fintech firm’s total equity fundraise to $90 million since inception in 2011, Hardika Shah, Founder and CEO at Kinara Capital, told VCCircle.
In April this year, the MSME-focused lender had last raised an equity round of Rs 380 crore (around $50 million) from two new global investors led by Nuveen Global Impact Fund, along with Dutch investor Triple Jump.
“We have already crossed Rs 1,700 crore AUM as on September. With consumer demand back and SMEs looking to grow their businesses, demand is not a challenge for us. And with automation of our business, we aim to grow faster and plan to double from March this year to Rs 2,400-2,500 crore by March end 2023.
We have moved from traditional underwriting to fully automated AI/ML based underwriting and decision making across branches. This has helped us reduce our turnaround time (TAT) from around 5 - 8 days five years ago to now 28-48 hours,” Shah added.
Established in 1948 as CDC, which was rebranded as British International Investment beginning April 2022, the investment company has an existing portfolio of over $2 billion in India. Globally, in the last five years it has invested close to £7 billion (around Rs 69,620 crore).
Last year, BII announced the intention to invest up to $1 billion in climate funding in India over the next five years. Over the last four years, CDC has invested over $1 billion in climate finance across Africa and South Asia.
“BII seeks to invest in companies that demonstrate strong development impact capacity and offer tech-enabled innovative solutions with high potential for scalability and Kinara Capital meets these criteria…,” said Manav Bansal, Managing Director and Head of India, BII.
Kinara, founded by Shah more than a decade ago, is a non-banking financial company (NBFC) operated by Visage Holdings and Finance Pvt. Ltd. It has 125 branches with presence in six states and plans to enter one more state either Madhya Pradesh or Rajasthan in the coming year.
Shah further said that Kinara had reported profit at Rs 14 crore for March this year and expects this to grow 2.5-3 times by March 2023.
In October last year, Kinara Capital had raised debt financing Rs 70 crore from Invest in Visions GmbH (IIV).
Kinara Capital’s other equity investors include Gaja Capital, GAWA Capital, Michael & Susan Dell Foundation and Patamar Capital.