NeoGrowth raises $8.8m to expand MSME lending

By Divya Shah

Why this matters: For FinTechs, the deal highlights growing opportunities in MSME financing, embedded lending and alternative credit assessment. 

Mumbai-based digital lender NeoGrowth has raised approximately $8.8 million through a combination of equity and debt financing from Dutch development finance institution FMO and existing investor LeapFrog Investments. The funding will support the company’s plans to expand its loan book to nearly $310 million before pursuing another equity raise.

Founded in 2011 by Dhruv Khaitan and Piyush Khaitan, NeoGrowth provides financing solutions tailored to micro, small and medium enterprises (MSMEs). Its portfolio includes both collateral-free and secured business loans designed to address the funding needs of small businesses.

The company leverages technology and data analytics to assess creditworthiness using digital payment records, point-of-sale (POS) transactions and business cash flows instead of relying solely on traditional collateral-based lending models. It also offers flexible repayment options, enabling borrowers to repay loans daily, weekly, fortnightly or monthly.

NeoGrowth operates in more than 25 cities across India and serves over 80 business segments, with a customer base exceeding 100,000 businesses.

The latest funding comes as digital lenders increasingly use alternative data sources such as GST filings, banking transactions and digital payment histories to evaluate borrowers and extend credit to underserved MSMEs.

NeoGrowth previously raised $36 million in a Series D funding round in 2022 led by FMO alongside existing investors.

The broader MSME lending sector continues to attract investor interest as fintech firms develop embedded finance, supply-chain financing and cash flow-based credit solutions.

Recent funding rounds in the segment include Prayaan Capital‘s $11.4 million raise, GetVantage‘s $6.5 million funding, Business Nextgen Finance‘s $22.2 million capital infusion, FlexiLoans’ $38.8 million Series C round, and Techfino‘s $6.7 million fundraising.