Fintech player NeoGrowth raises $36.2 mn from FMO, others

By K Amoghavarsha

  • 15 Dec 2022
Credit: 123RF.com

MSME-focused digital lender, NeoGrowth has raised Rs 300 crore (around $36.2 million) in a Series D equity round led by from Dutch development bank FMO and existing investors. FMO invested Rs 160 crore (19.2 million) out of the total amount.

The Mumbai-based fintech startup will utilize the funds scale geographical expansion and consolidation along with development in its digitally enabled products, according to a statement.

NeoGrowth - with an AUM (assets under management) of Rs 1,600 crore - claims to have connected with over 1,50,000 MSMEs since its inception and disbursed around $1 billion in loans. The company has been profitable for the last four consecutive quarters.  

Speaking on the fundraise, Arun Nayyar, managing director & chief executive officer, NeoGrowth, said, “We believe that this fresh funding from FMO will enable us to accelerate our growth by using our business model.” 

The decade-old startup offers loans to small businesses, based on underwriting of their digital transactions and cash flow to assess the health of the business. Its lending activities also focus on the financial inclusion of first-time entrepreneurs, women business owners, and underserved small businesses. It offers loans to MSMEs across a multitude of segments and has its presence at around 25 locations in India. 

NeoGrowth is also backed by investors, namely Omidyar Network, Lightrock, Khosla Impact, Accion Frontier Inclusion Fund – Quona Capital, IIFL Seed Ventures Fund, WestBridge and Leapfrog Investments. 

FMO is the Dutch entrepreneurial development bank that focuses on sectors like agribusiness, food & water, energy, and financial institutions. Their total committed portfolio of 12 billion euros and have their presence in over 85 countries. NeoGrowth has been a debt client of FMO’s since 2017 said Peter Maila, FMO's co-chief investment officer.  

In November 2022, NeoGrowth secured $20 million (around Rs 160 crore) from the United States International Development Finance Corporation (DFC) via the external commercial borrowing (ECB) route.