Nivara Home Finance Secures $10 Million to Fuel Growth in Affordable Housing

Bengaluru, Nivara Home Finance, a leading player in affordable housing finance, has secured $10 million (INR 82.4 crore) in a funding round led by Baring Private Equity India. This fresh infusion of capital will empower Nivara to accelerate its expansion plans and cater to the growing demand for affordable housing in India.

Focus on Underserved Markets with Small-Ticket Loans

Founded in 2015 by CV Rao, Sunil Rohokale, and Monik Koticha, Nivara bridges the gap in the housing finance sector by offering small-ticket loans ranging from INR 5 lakh to INR 7.5 lakh. This focus on micro-entrepreneurs and salaried professionals in Tier 2, 3, and 4 cities addresses a significant underserved market.

Nivara's co-founder and CEO, CV Rao, expressed enthusiasm about the partnership with Baring PE India. "This funding round strengthens our position in the affordable housing segment and allows us to significantly advance our growth strategy. We share a common vision with Baring PE India to empower individuals who aspire to own a home," Rao stated.

Baring PE India Backs Nivara's Vision

Debanshi Basu, a senior principal at Baring PE India, highlighted the key factors behind the investment decision. "The affordable housing finance space holds immense potential for growth, and Nivara's commitment to exceptional asset quality, serving underserved segments, and its team's experience make it a compelling investment opportunity."

Strong Track Record and Growth Trajectory

Nivara has established a robust presence across five states - Karnataka, Tamil Nadu, Andhra Pradesh, Telangana, and Maharashtra - through a network of 63 branches. As of February 2024, the company boasts assets under management (AUM) of INR 500 crore with remarkably low gross non-performing assets (GNPAs) of 0.58%. Notably, Nivara has been bootstrapped since its inception and claims profitability throughout its journey. The company also infused INR 100 crore of capital from its promoters.

Standing Out in a Competitive Landscape

Nivara operates in a dynamic market featuring established players like Indiabulls Housing Finance and India Home Loan, alongside innovative startups such as Basic Home Loan and Housing.com-backed Easiloans. However, Nivara's focus on underserved markets, small-ticket loans, and a strong financial performance set it apart.

Following Vridhi Home Finance's Funding Success

This development comes shortly after another promising housing finance startup, Vridhi Home Finance, secured INR 150 crore in a funding round led by Elevation Capital. These back-to-back funding rounds signal growing investor confidence in the Indian housing finance sector.

A Thriving Market with High Growth Potential

The Indian housing finance segment presents a significant growth opportunity due to its underpenetration. According to Mordor Intelligence, the domestic home loan market is estimated to be valued at $300 billion. Furthermore, Inc42 reports that the Indian digital lending market is projected to reach a staggering $1.3 trillion by 2030, reflecting a promising CAGR of 22%.

Nivara Home Finance's successful funding round positions the company to capitalize on this growth potential and empower a broader segment of the Indian population to achieve their dream of homeownership.