FinAGG Technologies Secures USD 11 Million Funding To Amplify MSME Credit Access

FinAGG Technologies, a fintech startup providing working capital solutions to micro, small, and medium enterprises, recently secured USD 11 million in a Series A funding round, led by Tata Capital and Schroders-backed BlueOrchard. Notable participants included the Small Industries Development Bank of India (SIDBI) and existing investor Prime Venture Partner.

As a loan agent partner of the Open Credit Enablement Network (OCEN), FinAGG also disclosed an additional million dollars raised through the buyout of shares from early employees. The company had previously secured external capital in two seed funding rounds in 2020 and 2022 from investors like BLinC Invest and Prime Venture Partners.

FinAGG founder and CEO Nipun Kohli said that the company currently has a presence among MSMEs in 45 cities, with plans to expand to 150 cities within the next six months. Presently, 70 per cent of the company's total revenues are generated from services to banks, with the remainder attributed to technology enablement for these banks.

Countrywide Expansion

Srini Ramki, Co-founder and CTO of FinAGG Technologies, highlighted the company's significant impact, reaching over 85,000 borrowers in 100 tier 1 and tier 2 cities. “The funds would play a crucial role in expanding FinAGG's reach pan India, aligning with the goal of impacting over 2,50,000 lives by March 2025. The financial infusion supports both expansion efforts and the commitment to making a meaningful difference in the MSME financing landscape,” he said.

FinAGG facilitates credit access and underwrites loans without utilizing its own balance sheet. The company collaborates with lenders like Tata Capital, SIDBI, Aditya Birla Finance, and HDFC Bank to extend credit to MSMEs. Access to these enterprises is established through partnerships with fast-moving consumer goods distributors, including ITC.

Rajiv Sabharwal, Managing Director and CEO of Tata Capital, expressed satisfaction with the existing partnership, emphasizing FinAGG's tech-driven efficiency and focus on distributor finance access.

Making MSMEs Resilient

Established in 2019, FinAGG utilizes OCEN and GST Sahay for its supply-chain financing business, with some products developed within the sandboxes of the Reserve Bank of India and International Financial Services Centres Authority.

Mahesh Joshi, Head of Private Equity Investments-Asia at BlueOrchard, said, “The collaboration with FinAGG aims to enhance financial service accessibility, propel growth, and fortify the resilience of the vulnerable MSME sector in India. The joint aspiration is to make substantial contributions to the economic empowerment and sustainability of MSMEs across the nation.”