MSME-focused digital lending firm FlexiLoans raises Rs 290 crore

FlexiLoans, a digital non-banking financial company (NBFC) focused on providing loans to micro, small, and medium enterprises (MSMEs), has raised Rs 290 crore in a Series C funding round. 

The funding round was led by global investors, including Accion, Nuveen, and Nandan Nilekani-backed Fundamentum, with participation from existing investor Maj Invest. 

Unitus Capital served as the exclusive advisor for the transaction.

The Mumbai-based firm has raised over $182 million in funding in a mix of debt and equity from investors, including Accion, JM Financial, Vivriti Asset Management, and Nuveen, a TIAA Company. 

Focused on scaling operations

FlexiLoans plans to utilize the fresh funds to scale its operations, enhance its product offerings, and further develop its technological infrastructure.

India's MSME sector, which contributes about 30% to the country’s GDP, remains largely underserved, with less than 10% of MSMEs having access to loans from traditional financial institutions.

To address this gap, FlexiLoans plans to enhance its lending capacity, particularly targeting tier-2 and tier-3 cities, where access to finance is even more limited.

FlexiLoans' market presence

Founded by Deepak Jain, Manish Lunia, Ritesh Jain, and Abhishek Kothari, FlexiLoans is an online lending platform that offers MSMEs access to collateral-free funds. The firm uses proprietary technology and risk models to score customers and approve loans within 48 hours.

It currently offers two main products: EMI-based loans with repayment periods ranging from 12 to 36 months, and invoice financing for short-term credit needs, with repayment terms between 30 and 90 days.

FlexiLoans claims to have disbursed over Rs 7,000 crore in loans across 2,100 cities. The firm operates in over 15,000 pin codes through digital channels, without physical branches, and has an annual disbursement run rate of over Rs 4,000 crore, serving more than 1.5 million registered users.

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Aiming to expand AUM

With a current assets under management (AUM) exceeding Rs 2,000 crore, FlexiLoans aims to fivefold this figure to Rs 10,000 crore over the next three years.

For FY24, FlexiLoans reported a 142% year-on-year increase in revenue from Rs 108.5 crore in FY23 to Rs 262 crore. However, despite the revenue surge, the firm saw its profits decline by 50%, with profits at Rs 3.3 crore in the same period. 

“We are pleased to have secured Series C round from such global blue-chip private equity funds who resonate with our vision to empower MSMEs across India. With this capital, we will further our mission of driving financial inclusion, expanding our reach, enabling more underserved MSME businesses to access the funds they need to grow and succeed," said Deepak Jain.