Flexiloans Raises ₹290 Crore in Equity Funding to Fuel Growth in Digital Lending

Mumbai-based digital lending startup Flexiloans has secured ₹290 crore (approximately $35 million) in an equity funding round, marking another significant step in its expansion. The funding round was led by Accion, a U.S.-based non-profit fund, Nuveen, a U.S. asset management firm, and Fundamentum, a venture fund backed by Nandan Nilekani. Denmark-based Maj Invest, which had participated in the previous round, also contributed.

Strategic Use of Funds to Fuel Growth

Flexiloans cofounder Deepak Jain emphasized that the company is cash positive and will use the new funds primarily to capitalize its credit business and expand operations. Unlike typical funding rounds where firms might need cash for basic operations, Flexiloans' positive cash flow allows it to channel investments into scaling its lending business.

Although the company's valuation post-deal remains undisclosed, previous reports suggest it is valued around ₹1,200 crore ($143 million).

A Steady Rise Since 2016

Founded in 2016 by Indian School of Business alumni Deepak Jain, Ritesh Jain, and Manish Lunia, Flexiloans has grown into one of India's leading digital lending platforms. Over the years, it has raised a total of ₹636 crore in equity funding. One of its prominent backers is Sanjay Nayar, the former head of KKR India.

Flexiloans has built an asset under management (AUM) of around ₹2,000 crore and disbursed ₹3,000 crore in loans to small and medium-sized businesses (SMBs) in the fiscal year 2023-24. The company has kept its gross bad loans at a manageable 3.4% of its AUM, demonstrating strong operational discipline.

Scaling Ambitions for 2024

In the current fiscal year, Flexiloans aims to disburse ₹5,100 crore in loans, focusing on offering term loans and supply chain financing to SMBs. While customer acquisition is largely done digitally, the startup maintains a physical network of agents to handle loan servicing and collections. This hybrid model helps maintain control over bad assets while enabling sustainable growth.

Building Strong Collection Capabilities

Jain noted that investing in collection capabilities has been key to managing risks, which helps keep bad loans in check. This disciplined approach is part of the company's broader vision of growing sustainably, while continuing to serve India's expanding SMB market.