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NEOGROWTH CREDIT – THE INDIAN DIGITAL LENDING PIONEER – RAISES Rs.300 CRORES IN A ROUND LED BY LEAPFROG INVESTMENTS
Existing investors Aspada and Quona also participate in the funding round
Mumbai, 24thJanuary 2018: NeoGrowth Credit Pvt. Ltd., the pioneering digital financial lender to small and medium businesses, has raised Rs.300 Crores of equity capital. LeapFrog Investments, the largest dedicated equity investor in financial services and healthcare for emerging consumers, led the round, with existing investors Aspada Investment Company and Quona Capital, through Accion Frontier Inclusion Fund also participating.
NeoGrowth has pioneered a new category of lending for small and medium business owners based on analysing and underwriting digital payments data generated from daily sales. This approach revolutionises small business lending, making it possible for merchants who are unable to secure loans from traditional banks, to access a NeoGrowth loan. Flexible, small, daily automated repayments are also one of the hallmarks of the business.
Founded by Dhruv and Piyush Khaitan in 2012, NeoGrowth has rapidly expanded operations to 21 major Indian cities to-date. The Mumbai-based digital lending firm plans to utilize the new capital to grow its loan book, continue to reach deeper into India’s largest cities and to further expand into other urban areas.
According to a 2017 survey of NeoGrowth’s customers, 50% did not have access to formal funding prior to their first NeoGrowth loan and 82% stated that their business had benefitted financially from being able to access a loan from NeoGrowth. This is testament to the strength of NeoGrowth’s innovative model and the value it creates for customers, building a financial footprint, and promoting business growth.
“India’s digital lending space is experiencing massive growth, providing unprecedented opportunity for NeoGrowth to apply its pioneering technology approach to enable loans for a rapidly expanding SMB merchant segment,” said Piyush Khaitan, Managing Director, NeoGrowth Credit Pvt. Ltd. “We are delighted to be embarking upon this stage of expansion with LeapFrog, given the team’s track record in growing leading fintech pioneers through its experience in technology innovation, product expansion and market growth.”
Michael Fernandes, Partner at LeapFrog, who led the investment, joins NeoGrowth’s Board of Directors. “India is at an inflexion point as the rise of cashless financial services, harnessing big data, transforms the lives of millions of emerging consumers,” he commented. “NeoGrowth is at the forefront this transformation. By providing loans to underserved merchants against their future digital sales, it unlocks credit that is tailored to their business requirement, which in turn inspires growth and job creation.”
“NeoGrowth’s emphasis on analytics-driven underwriting and technology-enabled re-payment are the strategic ingredients that have helped the firm expand its customer base across India,” said Aspada Co-Founder Thomas Hyland. “With the current wave of digitization in India and the increase in adoption of digital payments, the market for digital lending to SME’s is destined to expand further.”
Ganesh Rengaswamy, Co-Founder and Partner, Quona Capital – which manages the Accion Frontier Inclusion Fund – commented, “Merchants today are seeking smart access to finance in a simple and hassle-free manner. NeoGrowth is pioneering digitization of SME financing, which is one of the best responses to this need.”
NeoGrowth featured in this year’s Top 50 emerging market fintech firms as selected by KPMG and H2 Ventures. NeoGrowth used Avendus Capital as exclusive financial advisors and Khaitan & Co. (KCO) as the legal counsel during the fundraise process.