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FinAGG Raises $11 Million to Empower MSMEs with Working Capital Solutions

FinAGG Technologies, a fintech startup that offers working capital solutions to micro, small and medium enterprises (MSMEs), has secured $11 million in a Series A funding round. The round was co-led by global impact investment manager BlueOrchard and Tata Capital Limited, with participation from the Small Industries Development Bank of India (SIDBI) and existing investor Prime Venture Partners.

FinAGG’s Innovative Model and Growth Story

FinAGG was founded in 2019 by Nipun Kohli, a former banker and entrepreneur, with a vision to democratize access to credit for MSMEs in India. The startup leverages technology to provide cost-effective and seamless loans to MSMEs, especially in the FMCG, consumer electronics, and building materials sectors. FinAGG partners with leading banks, NBFCs, and businesses to offer supply chain financing solutions to MSMEs.

FinAGG is one of the few companies to have completed both the RBI and IFSCA sandboxes, having pioneered the usage of OCEN and GST Sahay for supply chain finance. The platform is integrated with India Stack’s Aadhaar, GSTN, UPI, NACH, and other services, allowing lenders to access expansion capital quickly and easily. FinAGG also uses data analytics, artificial intelligence, and machine learning to assess the creditworthiness and risk profile of MSMEs.

Since 2020, FinAGG has onboarded significant consumer brands and is currently working with over 25 companies, including key banks, NBFCs, and businesses that promote MSME growth in India. The startup claims to have disbursed over Rs 500 crore of loans to more than 10,000 MSMEs across 45 cities in India. FinAGG aims to expand its presence to 150 cities in the next six months and reach out to more than 100,000 MSMEs in the next year.

FinAGG Raises $11 Million to Empower MSMEs with Working Capital Solutions

How FinAGG Will Utilize the Funding

The fresh capital will be used by FinAGG to expand its offline and online presence, enhance its global outreach, and drive product innovation. The startup also plans to hire more talent, strengthen its technology infrastructure, and diversify its product portfolio. FinAGG will also focus on empowering women entrepreneurs financially, as it has secured an additional half a million dollars from Gray Matter Capital through Non-Convertible Debentures (NCDs) for this purpose.

FinAGG’s founder and CEO, Nipun Kohli, said, “We are delighted to have the support of our new and existing investors in our journey to transform the MSME financing landscape in India. With this funding, we will be able to scale up our operations, reach out to more underserved MSMEs, and offer them customized and affordable credit solutions. We will also continue to invest in technology and innovation to create a superior customer experience and a strong value proposition for our partners.”

What the Investors Have to Say

The investors who participated in the Series A round expressed their confidence and excitement in FinAGG’s vision and potential. Rajiv Sabharwal, the MD & CEO of Tata Capital, said, “Our existing partnership with FinAGG in the SME supply chain has been successful, showcasing promising traction. We value FinAGG’s tech-driven efficiency and focus on distributor finance access. Excited about our continued collaboration, we anticipate a fruitful partnership and are committed to supporting FinAGG’s next phase of growth. Together, we aim to drive innovation and excellence in the evolving landscape of financial services.”

Mahesh Joshi, head of private equity investments- Asia at BlueOrchard, said, “FinAGG’s innovative model employs technology to seamlessly provide cost-effective loans to MSMEs. Rapidly becoming a premier partner to blue-chip companies in FMCG, consumer electronics, and building materials, FinAGG gains access to millions of Indian MSMEs. Our collaboration with FinAGG is aimed at enhancing financial service accessibility, propelling growth, and fortifying the resilience of the vulnerable MSME sector in India. Together, we aspire to make substantial contributions to the economic empowerment and sustainability of MSMEs across the nation.”

Sanjay Swamy, managing partner at Prime Venture Partners, said, “We are thrilled to continue backing FinAGG in its mission to solve the working capital challenges of MSMEs in India. FinAGG has demonstrated strong execution and growth in the last two years, leveraging its deep domain expertise, robust technology platform, and strategic partnerships. We believe FinAGG has the potential to become a category leader in the fintech space and create a lasting impact on the MSME ecosystem.”

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