Mumbai-based lending firm Svasti Microfinance has raised ₹34 crores from Nordic Microfinance Initiative (NMI) and Adar Poonawalla, CEO of Serum Institute of India. Some other investors also participated in the funding round.
Earlier in 2015, the startup raised funds from Adar Poonawalla who subsequently invested again in 2017 and in the current round as well. The microfinance startup is backed by The Michael & Susan Dell Foundation, Bamboo Capital Partners, venture capitalist Sajid Fazalbhoy and investment banker Rajid Dadlani.
Arthur Sletteberg, Managing Director of NMI, commenting on the transaction says, “We are very impressed with the platform that Svasti has laid so far, by building a high-quality portfolio over the years that has shown great resilience even through black swan events like demonetization as a result of its strong processes, backed up by smart technology and a strong team. We are confident that Svasti will be able to build further on this strong foundation to successfully expand and scale its business. We also like that Svasti is very serious about being a responsible lender and puts the customers’ interests and customer protection at the front and centre of its strategy, which aligns very well with NMI’s social mission.”
Founded by Arunkumar Padmanabhan and Narayanan Subramaniam in 2010, the firm has served 1,41,000 customers across 38 branches in 4 states with a loan portfolio of ₹255 crores. The finance company expects to close the current financial year with ₹350 crores loan book and is planning to double it to ₹700 crores by March 2020.
Commenting on the transaction, Svasti’s Co-Founder Narayanan says, “Over the years, we have built best-in-class processes backed by proprietary technology, built entirely in-house. This gives us significant operational efficiencies, controls, and data analytics capabilities as we scale up. The fact that we have attracted gold standard investors like NMI and Adar Poonawalla, is a testament to our vision and mission to fulfil the right to finance and help transform the lives of 10 million women by 2030. Over the next couple of years, Svasti will be a diversified financial services provider to the millions of uncounted low and middle-income households across India, and be known for our deep relationships with our customers.”
The startup will use the funds to expand its MSME loan portfolio and introduce other financial products like consumer finance and insurance in partnership with leading institutions. The funds will also be used to provide exits to some of Svasti’s early investors. Svasti plans to raise another ₹100 crores in the next 12 months.