Mumbai-headquartered Saarathi Finance, a newly established non-banking financial company, has raised nearly $55 million (Rs 475 crore) in its first round of funding, it announced on Wednesday.
The Series A investment was led by notable investors, including TVS Capital Funds, Lok Capital, Evolvence Equity Partners, and Paragon Partners, along with several prominent angel investors, who together contributed Rs 350 crore. Vivek Bansal, founder and CEO, and Sunil Daga, co-founder, infused the remaining sum.
DealStreetAsia was the first to report in January that Saarathi Finance was in talks with multiple private equity firms for funding.
The funding round has valued Saarathi Finance at over Rs 900 crore ($105 million), the company said in a statement.
Saarathi Finance, which supports small and medium businesses (MSMEs) in India—particularly in underserved areas like small towns and villages—plans to use the funds to improve access to loans for businesses across states including Tamil Nadu, Telangana, Andhra Pradesh, Karnataka, Rajasthan, and Uttar Pradesh, the statement added.
“Saarathi Finance embodies the spirit of inclusive growth that aligns with our vision of supporting micro and nano businesses crucial to India’s journey towards a $10 trillion economy. Their focus on MSMEs in underserved regions resonates with our commitment to empowering next-generation entrepreneurs who are the backbone of India’s economic development,” said Gopal Srinivasan, chairman and managing director, TVS Capital Funds.
Saarathi Finance’s approach combines technology-driven solutions with personalised customer engagement, offering both secured and unsecured loans tailored to the unique needs of MSMEs.
Even as the MSME sector in India is touted to be the backbone of the economy, businesses operating in this sphere often face a huge credit gap estimated at a whopping $540 billion.
In the startup space, players that have made a prominent mark in this sector include names such as Indifi, UGro, Lendingkart, Flexiloan, and InCred, among others.
