Electronica Finance secures $48m in Series-B funding led by LeapFrog

By Delisha Fernandes

Electronica Finance Limited (EFL), one of India’s largest providers of loans to MSMEs (Micro, Small and Medium Enterprises), has agreed upon $48 million of new funding. The equity round was led by LeapFrog Investments, with participation from Aavishkaar Capital.

The funds secured will greatly strengthen the company’s balance sheet and provide the foundation for another phase of rapid expansion. The new capital will be used to boost MSME financing in the high growth potential manufacturing segment in India. EFL offers products like machine loans, rooftop solar loans and working capital loans, as well as micro loans against property in semi urban and rural India with an aim to provide sustainable financial inclusion.

Shilpa Pophale, Managing Director & CEO, Electronica Finance Limited, said, “With a strong track record and deep expertise in this segment, EFL remains committed to providing technology-based solutions and financial support to MSMEs that are powering India’s unprecedented economic growth. This association with two leading social impact investors can help us support small businesses to thrive and deliver resilient, low-carbon growth.”

To date, EFL has financed more than 75,000 machines, helping their customers transition to less energy-intensive production. In addition, EFL’s pioneering efforts in the rooftop solar credit market have helped many of these firms switch to rooftop solar power systems and its financing has already helped to save more than 50,000 metric tonnes of Co2 emissions over the last three years, while reducing energy costs for MSMEs.

Stewart Langdon, Partner, LeapFrog Investments, said, “Electronica Finance Limited is transforming India’s MSME sector through its sustainable financing solutions. Their funding plays a vital role in financial inclusion and climate resilience for small business owners who have long been overlooked by banks. The benefits of these loans go beyond the small business owner, catalysing job creation and supporting households and communities. We are delighted to have secured this fundraising round for Electronica Finance Limited and look forward to supporting Shilpa and the team as they continue to scale-up their presence across the country.”

Anurag Agrawal, Partner, Aavishkaar Capital said, “Electronica Finance Ltd has a proven track-record of providing innovative financing solutions for MSMEs and we are excited to be their partner as they enter their next phase of growth. Aavishkaar Capital’s India Fund VI is committed to channel capital to resilient businesses solving large problems and EFL’s diverse portfolio across MSME, climate and rural financing brings significant opportunity to bolster inclusive development.”