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Tata Capital and Blue Orchard Head $11M Series A Funding in MSME Financeier FinAGG

Funding Alert

Based in Noida FinAGG Technologies, a cash-flow financier for small and medium enterprises (SMBs) in India, has secured $11 million in a Series A funding round led by Tata Capital Limited and Swiss investment firm Blue Orchard. Small Industries Development Bank of India (SIDBI) and existing investor Prime Venture Partners participated in the round. In addition, global investor Gray Matter Capital made an early-stage investment through non-convertible bonds.

“With this funding, the banking division of SIDBI has made its first investment in the fintech space. This, along with the support of Tata Capital and Blue Orchard, underscores our commitment to serving SMEs in India,” said Nipun Kohli, Co-Founder and CEO of FinAGG, in an interview with YourStory.

The supply chain finance company plans to use the funds to expand its omnichannel presence, strengthen its global reach and invest in product innovation, Kohli said. Founded in 2019 by Nipun Kohli and Srini Ramki, FinAGG Technologies offers working capital assistance to over 85,000 SMEs through integration with public digital infrastructure solutions such as Unified Payments Interface (UPI), Aadhaar and GSTN among others . It aims to provide lenders with quick and easy capital growth through the underwriting process.

FinAGG also provides services to financial institutions, including several of the country’s largest private sector banks, non-bank financial institutions and small finance banks. In November, the firm received approval from banking regulator The Reserve Bank of India (RBI) for a regulatory sandbox called Quick Cash Flow for MSME lending. It is now developing two more financial products in close collaboration with the RBI, Kohli said.

India is home to more than 6.2 million SMEs that contribute to GDP and employment. However, supply chain financing remains a challenge for many businesses, with the gap estimated at over Rs 60,000 crore. FinAGG said it has disbursed loans in excess of Rs 5,200 crore to date, with 20% of these businesses led by women entrepreneurs, driving 22% annual revenue growth and promoting financial awareness and inclusion.

The company is also working to bring blockchain to the underwriting industry, which until recently largely operated on conventional pen and paper, Kohli noted. «These new features will help us look at borrowers in a completely different light and make underwriting in this space more meaningful.»

Commenting on the fundraising, Kohli said, “We have been able to bring in investor partners who share high synergy with us and are experts in their respective fields. Having the likes of BlueOrcard who are leaders in terms of climate impact programs will help us drive the penetration of climate insurance to our client, Tata Capital, which is one of the largest NBFCs in India, will help us scale. our business operations to new heights and SIDBI, which is a GOI-owned development bank, will help us expand GST Sahay through access to cheap funds.”

“Our existing partnership with FinAgg in the SME supply chain has been successful and is showing promising traction. We value FinAgg’s technology-driven efficiency and focus on distributor funding access. We are excited about our continued collaboration, look forward to a fruitful partnership and are committed to supporting the next phase of FinAgg’s growth,” said Rajiv Sabharwal, Managing Director and CEO, Tata Capital.

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