Jaipur, India-based Non-banking financial company Finova Capital has raised $135 million in a Series E funding round from new investors Avataar Venture Partners, Sofina, Madison India Capital, and returning investor Norwest Venture Partners.
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In 2020, the company had raised $35 million from investors led by Sequoia Capital and in 2022 has raised $65 million from Norwest Venture Partners, Maj Invest and Faering Capital.
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Finova Capital is focussing on microentrepreneurs and smaller loans/geographies. It has built templates for assessing cash flow or income of small entrepreneurs who do not have credit history or proper documentation. For instance, the template for tea stall owners estimates monthly cash flow or income based on the quantity of milk and sugar consumed and the number of gas cylinders used, apart from retail and corporate sales (to offices).
“We are very excited to welcome our new investors—Avataar Venture Partners, Sofina, and Madison India Capital, who share our vision of financial inclusion. Along with them, we appreciate the support from our existing investors—Peak XV Partners, Faering Capital, Norwest Venture Partners, and Maj Invest,” said Mohit Sahney, Founder and MD at Finova Capital, in a statement.
The firm addresses customer segments like micro entrepreneurs and semi-skilled professionals who do not have or have limited access to lending from formal financing institutions. The loans are tailored to the needs of its target segment of small service providers, manufacturers and retailers.
“As Avataar’s first investment in the financial services sector, we are delighted to be partnering with Finova, which is the market leader in the MSME financing space in North, Central, and West India,” said Anirudh Singh, Partner at Avataar Venture Partners, in the statement. He added that Finova has managed to grow 7X over the last four years.
Finova stands for financial innovation. It is NBFC licensed by Reserve bank of India. The company is headquartered in Jaipur & provides loan to both urban poor & rural poor to meet their productive requirements in starting new business or for growing an existing business.
About Finova Capital
Founded in 2016 by Mohit Sahney and Sunita Sahney, Finova Capital has 180 branches spread across 8 states in west, north and central India. It has 20,000 plus customers and more than Rs 1,000 crore loan book. Finova is backed by 34 banks, NBFCs and AIFs. Idea of Finova Capital originated with a belief that if supported well then micro & small medium enterprises can play a pivotal role in growing Indian economy.
