FlexiLoans Secures Rs 290 Crore in Series C Funding Round to Boost MSME Lending

Overview of the Funding Round

FlexiLoans, a prominent digital non-banking financial company (NBFC) specializing in loans for micro, small, and medium enterprises (MSMEs), has successfully raised Rs 290 crore in its Series C funding round. This significant capital infusion was led by a consortium of global investors, including Accion, Nuveen, and Fundamentum, backed by Nandan Nilekani. Existing investor Maj Invest also participated in this round. Unitus Capital served as the exclusive advisor for the transaction.

Use of Funds

The fresh capital will be instrumental in scaling FlexiLoans’ operations, expanding its product offerings, and enhancing its technological infrastructure. The Mumbai-based firm plans to address the substantial funding gap in India’s MSME sector, which is crucial for the country’s economic growth but remains largely underserved by traditional financial institutions.

Addressing the MSME Financing Gap

India’s MSME sector contributes approximately 30% to the country’s GDP. However, less than 10% of these enterprises have access to loans from conventional financial institutions. FlexiLoans aims to bridge this gap by boosting its lending capacity, particularly in tier-2 and tier-3 cities where access to finance is even more constrained.

About FlexiLoans

Founded by Deepak Jain, Manish Lunia, Ritesh Jain, and Abhishek Kothari, FlexiLoans provides MSMEs with access to collateral-free loans. The platform leverages proprietary technology and advanced risk models to assess and approve loans within 48 hours.

Currently, FlexiLoans offers two primary products:

• EMI-Based Loans: These loans have repayment periods ranging from 12 to 36 months.
• Invoice Financing: Designed for short-term credit needs, with repayment terms between 30 and 90 days.

To date, FlexiLoans has disbursed over Rs 7,000 crore in loans across 2,100 cities and operates in over 15,000 pin codes. The firm manages an annual disbursement run rate exceeding Rs 4,000 crore and serves more than 1.5 million registered users through its digital platform, without the need for physical branches.

Growth and Expansion Plans

FlexiLoans’ assets under management (AUM) currently exceed Rs 2,000 crore. The company aims to increase this figure fivefold to Rs 10,000 crore over the next three years.

For the fiscal year 2024, FlexiLoans reported a 142% year-on-year revenue increase, rising from Rs 108.5 crore in FY23 to Rs 262 crore. Despite this revenue growth, the firm experienced a 50% decline in profits, which stood at Rs 3.3 crore for the same period.

Statements from Leadership

Deepak Jain, Co-Founder of FlexiLoans, expressed enthusiasm about the new funding, stating, “We are pleased to have secured Series C round funding from such globally renowned private equity funds who resonate with our vision to empower MSMEs across India. With this capital, we will advance our mission of driving financial inclusion, expanding our reach, and enabling more underserved MSME businesses to access the funds they need to grow and succeed.”

Conclusion

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.