NeoGrowth raises Rs. 300 Crores in a round led by Leapfrog investments

Having pioneered the Digital lending phenomenon in India, NeoGrowth further boosted its vision of lending to small and medium businesses by raising 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.Rs in Hand

NeoGrowth’s unique approach towards lending to retailers is 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 much needed finance, a major requirement for the underserved SME market in India.

“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 SME merchant segment,” said Piyush Khaitan, Managing Director,
NeoGrowth Credit Pvt. Ltd. NeoGrowth plans to utilize the new capital to grow its loan book, continue to reach deeper into India’slargest cities and to further expand into other urban areas.

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.

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. “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.” 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 benefited financially from being able to access a loan from NeoGrowth.

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 and also amongst Top 10 Social Impact companies by Forbes. NeoGrowth used Avendus Capital as exclusive financial advisors and Khaitan & Co. (KCO) as the legal counsel during the fundraise process.