Faering, Sequoia invest $15m in India's Finova

Founded in 2016, Finova targets micro, small and medium-sized enterprises (MSME) and service providers in small towns and rural areas, committing customized loans of INR500,000-600,000 ($7,200-$8,700) for terms of up to seven years. Like other NBFCs targeting this segment, the company assesses creditworthiness through means other than formal documentation, which its customers often lack. In Finova’s case, it analyzes borrowers’ cash flows using proprietary software.

Finova claims to have disbursed over INR2.5 billion in loans to more than 4,500 customers since its launch. According to a statement, the company will use the new capital to expand its geographical reach, growing from 52 branches in one state to 75 branches in three states by the end of the year.

Sequoia’s financial services investments in India include Five Star Business Finance, an NBFC with a similar business model to Finova. The firm has backed Finova since 2017, when it committed an undisclosed amount of Series A funding to the company, returning for a $6 million round the following year. Currently Sequoia is investing its sixth India fund, which closed at $695 million last year.

Faering is raising its third growth capital vehicle, which launched last year with a target of $200 million. The firm targets minority investments in mid-market Indian companies across a range of sectors, including financial services, consumer products and services, healthcare, and logistics, investing INR300-800 million per transaction.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• South Asia
• Financials
• Early-stage
• India
• Sequoia Capital
• Financial Services
• NBFCs