Flexiloans to expand lending offerings, enter insurance following ₹665 crore funding
MSME lending player Flexiloans is planning to enter two new lending segments while also diversifying into insurance for its customers and is actively looking for acquisitions to support these multiple forays, a top executive of the firm told Mint.
This comes as Flexiloans raised more funds in an extended series C round totalling ₹665 crore from existing investors Fundamentum, Accion Digital Transformation, Nuveen, and Maj Invest, with new investor British International Investment joining the round.
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'We are looking at areas where we want to build up new products or new offerings for acquiring a larger share of wallet from these MSMEs," said Deepak Jain, co-founder and CEO, Flexiloans, in an interaction with Mint. 'We're aggressively and actively looking for (inorganic) opportunities."
In this round, the firm has raised ₹375 crore, with the intention to grow its assets under management (AUM) to ₹4,000 crore from ₹2,000 crore, within the next year. 'This funding should support our growth for the next 18 to 24 months, by which time we aim to reach ₹5,000-6,000 crore in AUM."
In September, the company raised ₹290 crore from investors in its first phase of Series C funding.
Jain added that a significant majority of the investment is primary fundraise, while the rest is secondary funding, where all early investors have made partial exits.
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'We will definitely be launching dealer financing and secured financing products over the next 12 to 18 months," he said.
Currently, almost 90% of its revenue comes from two existing offerings of equated monthly instalments (EMI) based term loans and vendor financing within the supply chain.
In addition, Flexiloans also plans to enter into offering insurance products to its existing Micro, Small and Medium Enterprises (MSME) customer base. 'Today, lending is our core product for MSMEs," the executive said. 'But the plan is to start cross-selling other financial services, such as insurance and similar offerings."
He explained that the company has already begun work on this expansion. 'We're looking at multiple insurance segments—life, general, and others. The idea is to build a full financial services suite around MSMEs."
Founded in 2016 by Jain and co-founders Ritesh Jain and Manish Lunia, FlexiLoans enables small businesses to access financing, especially in Tier 2 and Tier 3 cities. To date, the company has raised a total of ₹746 crore in equity and over ₹2,000 crore in debt.
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Prior to this round, the company raised capital from Sanjay and Falguni Nayar, MAJ Invest, and Fasanara Capital, along with other prominent family offices of erstwhile bankers. The firm claims to have empowered over 50,000 MSMEs, with about 66% of customers in Tier 2, 3 cities and beyond.
On the initial public offering (IPO) outlook, he added, 'Will we go for an IPO in the next round? Unlikely. We're more likely to work with sovereign and endowment funds. Once we hit ₹8,000-10,000 crore in AUM and achieve double-digit ROEs (Return on Equity), that's when we'll consider the public markets."
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