LeapFrog leads $47m round for India's NeoGrowth

Existing backers Aspada Investment and Quona Capital also participated. Quona invested via the Accion Frontier Inclusion Fund, which closed last year at $141 million and invested an undisclosed sum in the company alongside IIFL Asset Management last year. Previous investors also include Omidyar Network, Khosla Impact and Frontier Investments Group.

“India is at an inflexion point as the rise of cashless financial services, harnessing big data, transforms the lives of millions of emerging consumers,” Michael Fernandes, a partner at LeapFrog, said in a statement. “NeoGrowth is at the forefront of this transformation. By providing loans to underserved merchants against their future digital sales, it unlocks credit that is tailored to their business requirements, which in turn inspires growth and job creation.”

Founded in 2013, NeoGrowth provides business loans to small retailers in 21 major Indian cities that are repaid by future card receivables, e-commerce sales and other non-cash payments. The business model is said to benefit from India’s demonetization initiative, which has boosted adoption of digital payment methods. Reserve Bank of India data indicates that point-of-sale transactions rose 85% in value during the 12 months to September 2017 to INR740bn ($11.6 billion).

NeoGrowth will use the fresh capital to support an operational expansion in urban markets. This effort is expected to benefit from synergies with a number of companies in the LeapFrog portfolio, including WorldRemit, Cignifi, BIMA Mobile, AllLife and Fincare, one of India’s largest and fastest-growing digital banking platforms.

LeapFrog is currently raising its third emerging markets fund, which is targeting a corpus of $800 million for equity and quasi-equity investments in the range of $25-30 million. The fund received $200 million from the Overseas Private Investment Corporation in 2015 and a $25 million commitment from the International Finance Corporation last year.

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• Topics
• South Asia
• Financials
• Expansion
• India
• LeapFrog Investments
• Aspada Investments
• Financial Services
• e-commerce