Finova Capital, a Jaipur-based non-banking financial company (NBFC), on Tuesday said it has raised $135 million in a Series E round of funding from Avataar Venture Partners, Sofina, and Madison India Capital.
Existing investor Norwest Venture Partners also participated in the round, joining the cap table with existing investors Peak XV Partners, Faering Capital and Maj Invest. The transaction also provides a partial exit to early investors.
Founded in 2015 by Mohit & Sunita Sahney, Finova Capital provides business loans to micro, small, and medium enterprises. It claims to have been profitable since the first year, has a presence across 16 states with 400+ branches, and has served over 1 lakh customers.
The company said its current AUM is around Rs 3,000 crore, representing a five-year CAGR of more than 60%.
Finova will use the funds to grow its loan book, invest in technology, expand geographically, and further its vision of enabling financial inclusion at scale.
In 2022, it raised $65 million in financing from Norwest Venture Partners, Maj Invest, and Faering Capital, two years after raising $35 million from Sequoia Capital India and Faering Capital.
Finova joins other companies in the NBFC space that have recently raised funding. Clix Capital raised $26.3 million in a funding round led by Apollo Global Management, Pramod Bhasin, and Anil Chawla in August; while Avanse Financial Services Ltd, an education-focused NBFC, raised the largest funding round of around $120 million within the industry led by Abu Dhabi-based investment firm Mubadala Investment Company in March this year.
Other prominent deals within financial services include digital lending platform Fibe ($90 million), non-bank lender Ambit Finvest ($83 million), non-bank lender Northern Arc ($80 million), affordable housing finance company Ummeed Housing Finance ($76 million), NBFC Vivifi India Finance ($75 million), micro-financier Annapurna Finance ($72 million), and digital lending platform mPokket ($60 million).
Finova’s funding also comes amid a rise in megadeals, or deals worth at least $100 million. In Q3, 11 megadeals raised a total of $1.96 billion. The top-funded startups during the third quarter included quick e-commerce startup Zepto, non-bank lender DMI Finance, mother and baby products retailer FirstCry, edtech platform Physics Wallah, and budget hotel chain startup OYO.
