Bengaluru-based NBFC fintech Techfino has raised Rs 65 crore in funding from Stellris Venture Partners and Saison Capital. The fresh capital will be used to double its branch network from 30 to 60, strengthen its technology platform, and scale its secured lending business focused on MSMEs.
“Out of the 640 million registered MSMEs in India, 390 million are not part of the formal credit economy. This segment, especially in rural and semi-urban markets, generates an estimated quarterly demand of Rs 200,000 crore,” said Rajesh Panda, cofounder of Techfino.
He further said that the company has been profitable since its first full year of operations, as its core strength has been a tight grip on asset quality. “This fundraiser is purely equity and will be used to drive growth through branch-led expansion and people hiring, especially for our MSME loan against property business.”
Founded in 2019 by ex-bankers Rajesh Panda (Standard Chartered), Jayaprakash Patra (ICICI, ING), and Ratikant Satapathy (Bajaj Finance), Techfino runs two core lending businesses: unsecured education loans via a B2B2C model, and secured MSME loans.
So far, Techfino has disbursed over one lakh loans to date and crossed Rs 200 crore in AUM. While the education lending arm has seen consistent traction, the company is now doubling down on expanding its secured disbursement portfolio.
Speaking about the investment, Ritesh Banglani, Partner, Stellaris Venture Partners said the credit gap in the MSME sector is a massive opportunity for lending companies, which can be addressed through the formalisation and digitasation of small businesses through UPI and GST.
“Techfino has demonstrated that it is possible to build a high-quality, profitable lending business in this otherwise risky segment with strong underwriting and collections, and tech-enablement of the entire lending lifecycle,” he added.
Techfino provides Loan Against Property (LAP) to MSMEs in Tier II and III cities. The company currently disburses loans through a branch-driven model with operations across Karnataka, Gujarat, Madhya Pradesh, and Andhra Pradesh.
It also provides education loans through a B2B2C model, by establishing partnerships with education service providers. The company has been profitable since inception.
