In a major move to strengthen its rural lending platform, SarvaGram, a startup focused on providing financial services to underserved rural communities, has raised Rs 565 crore (approximately $67 million) in its Series D funding round. Led by Peak XV Partners, the funding round also saw participation from existing investors, including Elevar Equity, Elevation Capital, Temasek, and TVS Capital. This brings SarvaGram’s total funding to Rs 950 crore ($113 million) since its inception.
With this fresh capital, SarvaGram aims to scale its operations and extend its credit product offerings to more regions across India, reinforcing its commitment to improving financial access for rural populations. Let’s take a closer look at SarvaGram’s journey, its growth trajectory, and what this latest funding means for its future.
SarvaGram’s Mission: Empowering Rural India with Financial Inclusion
Founded in 2019 by Utpal Isser and Sameer Mishra, SarvaGram’s core mission is to enhance productivity and financial inclusion in rural India. The startup provides a variety of loans and financial products tailored to the specific needs of rural communities. These include business loans, farm loans, personal loans, home loans, and gold loans.
SarvaGram aims to help rural families and small businesses access affordable financing, enabling them to improve their lives and livelihoods. In addition to loans, the platform offers farm mechanization services and risk mitigation products, helping farmers and rural entrepreneurs overcome financial barriers and grow their businesses.
How SarvaGram Works: A Network of Services and Partnerships
SarvaGram operates across five states in India and serves over 100,000 customers through its extensive network of 150 branches. It has managed to build a strong presence in rural areas by offering loans that are easy to access and designed to meet the unique needs of rural customers.
The company has an impressive assets under management (AUM) of approximately Rs 1,200 crore in loans, with more than 70% of its portfolio secured by property as collateral. This robust asset base provides the company with a stable foundation to expand its reach and offer more tailored financial products.
In addition to its own lending operations, SarvaGram collaborates with a network of partner lenders, including IDFC First, AU Small Finance Bank, Oxyzo, Ambit Finvest, Alteria Capital, Vivitri, Western Capital, and Northern Arc, among others. These partnerships allow SarvaGram to leverage the strengths of established financial institutions while offering flexible lending options to its rural customers.
A Booming Business: SarvaGram’s Impressive Growth in FY24
SarvaGram has seen impressive growth in recent years. In FY24, the company reported a 2.3x increase in its revenue, reaching Rs 169.8 crore, up from Rs 73.4 crore in FY23. The company also made significant strides in improving its financial health, reducing its net losses by 27%, down to Rs 19.74 crore.
This revenue growth and improvement in financial performance demonstrate SarvaGram’s ability to scale its operations while maintaining a focus on sustainable growth. The company’s focus on securing its loan portfolio with property collateral has helped mitigate risk and position it for long-term success in India’s competitive lending market.
The Series D Funding Round: Strengthening SarvaGram’s Rural Focus
The Series D funding round is a critical milestone for SarvaGram, providing the company with the capital it needs to expand its operations and deepen its relationships with rural customers. Peak XV Partners, the lead investor in this round, has a history of backing high-growth startups, and their investment underscores the confidence in SarvaGram’s business model and vision for rural financial inclusion.
The new funds will be used to expand SarvaGram’s product offerings to more regions across India. With rural India’s demand for financial products growing rapidly, SarvaGram is well-positioned to meet the evolving needs of its customers. The funding will also help improve its technology infrastructure, enhance its loan servicing capabilities, and scale its operations across additional states.
Rural Lending Market: A Growing Opportunity for Investors
The rural lending market in India is a huge and untapped opportunity. With a large portion of the rural population still lacking access to formal credit, startups like SarvaGram are playing a pivotal role in bridging the gap. The demand for financial services in rural areas is rapidly growing, driven by factors like increased mobile phone penetration, government initiatives, and the need for affordable credit.
SarvaGram’s competitors, like Jai Kisan, are also making strides in the rural lending space. Jai Kisan raised $50 million in its Series B round in July 2022 and has since obtained an NBFC (Non-Banking Financial Company) license. As the market becomes more competitive, investors are looking for startups with strong business models, solid growth prospects, and an ability to navigate the unique challenges of lending in rural India.
The Future of SarvaGram: IPO Plans and Regional Expansion
As SarvaGram continues to grow, the company has set its sights on further expansion. The fresh capital from this Series D round will be crucial for reaching more underserved regions and expanding its customer base. The startup is also likely to focus on diversifying its loan offerings and enhancing its technology platform to provide a seamless customer experience.
Looking ahead, SarvaGram has the potential to become a leader in India’s rural fintech space. With its growing customer base, strong investor support, and commitment to financial inclusion, the company is well-positioned to make a lasting impact in India’s rural lending landscape.
One of the long-term goals for SarvaGram is likely to be an IPO (Initial Public Offering), which would provide it with the resources to scale further and enhance its market presence. The company’s rapid growth and strong investor backing make it a promising candidate for an IPO in the future.
Conclusion: SarvaGram’s Growing Role in Rural Financial Inclusion
SarvaGram’s latest $67 million funding round is a clear sign of the growing investor confidence in the rural lending market. The company’s innovative approach to providing credit and financial services to underserved rural communities is helping drive financial inclusion and economic growth. With its strong growth trajectory, solid partnerships, and plans for regional expansion, SarvaGram is poised to become a key player in India’s rural fintech sector.
As the company continues to scale and improve its product offerings, it has the potential to reach even more customers and play a significant role in shaping the future of rural finance in India.
