EaseMyTrip Founder's Optimo Loan Bags $10M to Address MSME Credit Gap

Rural MSME lender Optimo Loan has successfully raised USD 10 million in seed funding, marking a significant step towards bridging India's considerable MSME credit gap. The funding round was led by prominent investors Blume and Omnivore, with additional contributions from Optimo's Founder, Prashant Pitti. Pitti, also known as the co-founder of the travel company EaseMyTrip, spearheaded the venture, aiming to provide vital financial support to small businesses.

Venture Spearheaded by Easemytrip Founder Pitti

Prashant Pitti, who announced the lending platform in a post on X in July last year, emphasized the importance of the venture. The lending operations officially commenced in November last year, with Pitti expressing optimism about the venture's potential impact.

"We are scaling swiftly yet prudently," stated Pitti, highlighting the extensive experience of the top management team in MSME lending.

Tech and Co-Lending to Assist Small Businesses

Optimo Loan aims to utilize technology and co-lending agreements to effectively support small businesses. Pitti outlined the company's strategy to establish an asset-light approach, primarily leveraging partnerships with banks and larger NBFCs. The startup plans to employ a phygital distribution model, combining digital capabilities with physical outreach to extend credit to MSMEs across India.

Addressing the $530 Billion Credit Gap

With a staggering USD 530 billion credit gap in MSME lending in India, Optimo Loan seeks to make significant strides in addressing this pressing issue. The startup aims to provide accessible credit solutions to small businesses, particularly those in rural areas. By implementing a co-lending platform with advanced underwriting methods, Optimo intends to gain comprehensive insights into the financial health of its customers.

Expansion Plans and Utilization of Funds

The recent funding infusion will fuel Optimo's expansion plans and technological advancements. The company aims to enhance its operations, recruit new talent, and broaden its presence to twenty locations in rural India by the end of the year. Optimo plans to offer a range of financial products, including working capital, equipment financing, merchant cash advances, expansion loans, and invoice financing solutions, with repayment periods ranging from 12 to 24 months.

Growing Preference for NBFCs

Importantly, the growing preference for non-banking financial companies (NBFCs) among small businesses to raise credit underscores the need for innovative financing solutions. Optimo's approach aligns with this trend, aiming to provide flexible and accessible credit options tailored to the needs of MSMEs.

Investor Perspective

Reihem Roy, a partner at Omnivore, highlighted the massive opportunity in addressing the credit gap, with only 25% of MSMEs currently having access to formal credit. Ashish Fafadia, Partner at Blume Ventures, emphasized the importance of Optimo's mission in democratizing access to finance for MSMEs in rural India, given their substantial contribution to the country's GDP.

“We believe in Optimo’s mission to democratize access to finance for MSMEs in rural India, especially considering their significant contribution of 29% to GDP. To achieve the ambitious goal of elevating this contribution from 4 to 15 trillion over the next 15-20 years, it’s imperative to explore more effective collaboration avenues,” he said.

Join Our Thriving Entrepreneurial Community

Follow TICE News on Social Media and create a strong community of Talent, Ideas, Capital, and Entrepreneurship. YouTube  | Linkedin | X (Twittrer) | Facebook | News Letters