Indian fintech FinAGG has raised $11 million in a Series A funding round led by BlueOrchard and Tata Capital to improve financing access for millions of Indian MSMEs.

FinAGG, a fintech company that operates in the Micro, Small & Medium Enterprises cash flow financing segment, has announced a raise of $11 million in the Series A funding round.

The equity-based funding round was led by BlueOrchard, a global impact investment manager firm, and Tata Capital, one of India’s leading NBFCs. The Small Industries Development Bank of India (SIDBI) and existing investor Prime Venture Partners also participated.

According to the fintech startup, it has raised another million dollars by buying out the shares of its early employees. Additionally, FinAGG secured capital from Gray Matter Capital through Non-Convertible Debentures (NCDs).

Before Series A, FinAGG raised external capital in two rounds of seed funding in 2020 and 2022 from investors such as BLinC Invest and Prime Venture Partners.

Founded in 2019, FinAGG focuses on digital credit services for Indian Micro, Small & Medium Enterprises (MSMEs). The startup uses both the OCEN API framework and GST Sahay Lending Solution Platform for its supply-chain financing business.

Its Quick Cash Flow product was built out of sandboxes of the Reserve Bank of India and International Financial Services Centres Authority. The platform is also integrated with India Stack’s Aadhaar, GSTN, UPI, and NACH which ensures lenders access to quick growth capital.

FinAGG partners with local lenders including Tata Capital, SIDBI, Aditya Birla Finance and HDFC Bank to provide credit to enterprises it accesses through consumer goods distributors such as ITC.

FinAGG aims to use the fresh capital to expand its offline and online presence, enhance global outreach, and drive product innovation. In particular, the firm is considering using blockchain technology to improve its loan underwriting process.

The firm claims to have disbursed loans worth more than Rs 5,230 crore to over 85,000 MSMEs to date. Notably, around 30% of these enterprises are led by women entrepreneurs. Its reported Total Transaction volume exceeds 3.1 Lakhs.

FinAGG’s revenues from operations grew to Rs 11.96 crore during the fiscal year ending March 2023 from Rs 3.69 crore in FY22. However, the profit of the company decreased to Rs 8.56 lakh in FY23 from Rs 23.81 lakh in the previous fiscal year.