Indifi Technologies Raises Rs 290 Cr To Address Credit Gap In MSMEs

Gurgaon-based digital technology startup for lending to the MSME sector, Indifi Technologies, has successfully raised Rs 290 crores in its Series E funding round. With the raised funds, Indifi plans to expand lending operations to the funding starved micro, small and medium enterprises sector (MSME) sector.

From where did Indifi secure the funding?

The round was led by funds managed and advised by ICICI Venture, with participation from existing investors such as British International Investment, OP Finnfund Global Impact Fund I, Omidyar Network India, Flourish Ventures, and CX Partners.

How Will Indifi Bridge The Credit Gap In The MSME Sector?

The overall objective of the utilizing the funds is to bridge the credit gap in the MSME sector. The fresh capital infusion of Rs 290 crores will be used to fuel Indifi's growth and expand its current operations. The company aims to enhance its presence in the market and develop new products to serve the underserved segments of the MSME sector. 

With a mission to provide accessible, affordable, and quick credit to underserved MSMEs in India, Indifi has utilized its technology platform to disburse over 73,000 loans across 400+ cities, amounting to a total disbursement value of over Rs 4100 crore.

How Much Is The Credit Gap In The MSME Sector?

The Investment banking company Avendus Capital estimated an astounding credit gap of USD 530 billion in the MSME sector. Out of over 64 million MSMEs in India, the report said only 14 per cent have access to credit. While the overall finance demand by MSMEs was pegged around USD 1,955 billion with a 3.8x debt-to-equity ratio, the total demand for debt-based finance was approximately USD 1,544 billion.

Tailored Finance Solutions for All: Indifi's Commitment to Serving Businesses

Indifi Technologies, founded by Alok Mittal and Siddharth Mahanot in 2015, aims to bridge the gap in lending to businesses with a turnover of USD 36,400–USD 1.21 million per year. The startup's online marketplace provides unsecured loans tailored to the unique needs of businesses in various sectors, including travel, e-commerce, hotels, and retail.

How has Indifi Technologies been performing?

Indifi Technologies has been exemplifying growth and innovation as twin engines that drive impact at scale. The company turned profitable in February 2022 and has continued to grow in profitability ever since. Over the past eight years, Indifi has consistently expanded its offerings to ensure that all businesses can access formal finance tailored to their needs. The company's recent initiatives include providing instant business loans and enabling working capital finance for direct-to-consumer brands.

Speaking on the fundraise, Alok Mittal, MD & CEO, Indifi Technologies said in a statement, “As an organisation, our commitment has been unwavering when it comes to marrying technology with ground-level understanding to create positive outcomes for MSMEs across India.”

Speaking on behalf of ICICI Venture on the investment, Nikhil Mohta, Senior Director, Private Equity said “Indifi has created a best-in-class digital technology platform for lending to the large MSME sector, enabling access to credit for this highly underserved segment of the Indian economy. Indifi’s strong relationships with ecosystem partners and liability partners stand in good stead as it targets a rapid scale up. The robust governance and risk frameworks of the company inspire confidence and we are excited to partner with Indifi in its onward journey.”

Indifi's Recent Achievements and Roadmap

With over 73,000 loans disbursed across 400 cities, amounting to a total disbursement value of over USD 497 million, Indifi has been successful in serving its client base. Around 30% of its customers have been in business for less than two years, while over 20% are women entrepreneurs who often face challenges in obtaining credit from traditional channels.

Indifi's recent achievements include a 100% growth in value and a 150% increase in loan volumes over the last 12 months. The startup has also achieved profitability for six consecutive quarters since February 2022 and plans to utilize the fresh funds to explore new market segments, improve its technology infrastructure, and introduce new products to expand its reach and enable more businesses to access credit.

With a total funding raised to date of over USD 81 million, including the Series D funding round of USD 45 million announced in November 2021, Indifi Technologies is poised to continue its growth trajectory and make a significant impact in the MSME lending space. The company currently employs around 700 people across various roles, supporting its product analytics, technology, business development, and operational functions, including customer assistance and service.