NeoGrowth secures Rs 85 crore from development, impact investors

Digital lending platform NeoGrowth has raised Rs 85 crore in equity funding from a development bank and an impact-focused investor. The capital will expand its loan book to nearly Rs 3,000 crore before the company seeks another equity infusion, a co-founder told a financial publication.

NeoGrowth, which provides collateral-free loans to small merchants, plans to raise a significantly larger equity round next year. The company did not disclose its current valuation or loan book growth rate, but the target suggests confidence in scaling its underwriting model.

The round follows a period of cautious lending activity in India’s fintech sector, where regulatory scrutiny and funding constraints have slowed growth for some players. NeoGrowth’s ability to secure capital from development-focused backers may reflect its focus on underserved segments—small retailers and kirana stores—where demand for working capital remains strong.

While the company has not yet disclosed profitability, its funding timeline suggests a deliberate approach to growth. The planned raise for next year would position NeoGrowth among India’s better-capitalized digital lenders, though competition from banks and larger fintech players could pressure margins. Observers will watch whether the company can maintain its credit quality as it scales.

Sources: economictimes.indiatimes.com