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Seeds Fincap Raises Over $8.5M Led by Matrix Partners India (aka Z47) and Lok Capital
Gurugram, Wednesday, 17th July, 2024: The Non-Banking Financial Company (NBFC) Seeds Fincap Pvt. Ltd. raised over $8.5 million in a Series A funding round led by Matrix Partners India (aka Z47) and Lok Capital. The funds will enable Seeds Fincap to expand its lending capabilities, enhance its technological infrastructure, and broaden its branch footprint.
The micro, small, and medium enterprises (MSME) segment in India faces a credit deficit of over ₹8 trillion. MSME businesses operate across sectors like manufacturing, trading, and allied services. They are often under-served by traditional financial institutions like banks and large NBFCs. This segment requires specialized lenders with widespread branch networks, the ability to underwrite credit against informal incomes, and on-ground collections capabilities.
Seeds Fincap aims to meet the financial needs of these business owners with tailored credit products. The Gurugram-based lender provides secured and unsecured loans to MSMEs ranging from ₹1-5 lakhs in ticket size. The company employs a rigorous credit assessment process to evaluate cash flows and offer right-priced loans, while leveraging technology to monitor risk and lower operating expenses.
Within a short span, the firm has scaled to build a network of 90 branches across 8 states, with a significant presence in UP, Bihar, Rajasthan, and Haryana. Over three years, Seeds Fincap has disbursed over ₹600 crore in loans, serving more than 50,000 customers, and has expanded its loan book to over ₹330 crore. The NBFC has also built a diversified liability base with over 35 lending partners, including AU Small Finance Bank, Tata Capital, IDFC Bank, Yes Bank, and Vivriti Capital.
Seeds Fincap was established in 2021 by Subhash Acharya and Avishek Sarkar, both bringing decades of experience in the lending sector. With their seasoned expertise, they have successfully managed operations and risk across various organizations in the past, laying a strong foundation for Seeds Fincap's growth and success.
Subhash Acharya, Managing Director and Co-founder, Seeds Fincap Pvt. Ltd., shared, "MSMEs in India continue to be under-served on credit, often overlooked by incumbent financial institutions. At Seeds Fincap, we've developed a unique credit evaluation framework supported by a tech-enabled sourcing-to-collections process designed to empower enterprises with tailored financial solutions. Our partnership with investors, Matrix Partners India and Lok Capital, signifies a shared dedication to unlocking the immense potential within the MSME segment. This funding will not only fuel our expansion efforts but, more importantly, empower the dreams of our clients—the gritty entrepreneurs propelling India's economic engine forward."
Avishek Sarkar, Co-founder, Seeds Fincap Pvt. Ltd., added, "Our clients range from traders, small kirana shops, owners of micro-manufacturing units, and allied service providers, all of whom play a vital role in India's growth story. Most of them have working capital requirements and often struggle to access right-priced and timely credit. At Seeds Fincap, we provide a variety of credit products to meet these needs. Over the last three years, we have developed expertise in assessing their cash flows and underwriting these businesses."
On the investment, Vikram Vaidyanathan, Managing Director, Matrix Partners India (aka Z47), said, “MSME credit represents a massive opportunity in India as we scale towards becoming a $10 trillion economy, and is essential to that goal. Our thesis is to invest in high-quality businesses serving this segment with tailored “right-tech”, contextual credit products, especially in underserved geographies like North and Central India. We are impressed by Subhash and Avishek’s deep experience, understanding of this customer segment and their strong focus on credit and collections. We look forward to partnering with them and helping to build a world-class lending institution.”
Rajat Bansal, Director, Lok Capital, commented on the key milestone, “We remain committed to supporting the Seeds team in their mission. The company's clear emphasis on credit and risk management, along with their hands-on operational excellence, strengthens our confidence in their growth prospects. We believe that Matrix Partners India (aka Z47), with their proven track record and ecosystem standing, will be ideal partners for Seeds.”
Going forward, Seeds Fincap intends to scale its lending book, diversify into newer products, and invest in expanding its branch network.
About Seeds Fincap Pvt. Ltd:
Seeds Fincap Pvt. Ltd. is a Gurugram based Non-Banking Financial Company (NBFC) dedicated to promoting financial inclusion and supporting the growth of MSMEs across India. By providing tailored financial solutions and leveraging technology, Seeds Fincap empowers small businesses to overcome financial challenges and achieve sustainable growth. With a focus on promoting the local economy and fostering entrepreneurship, Seeds Fincap is committed to making a positive impact on the communities it serves.
About Matrix Partners India (aka Z47):
Founded in 2006, Matrix Partners India (aka Z47) invests in companies targeting the Indian consumer and enterprise market and has invested in several category-leading companies such as Razorpay (Payments), Five Star Business Finance (SME Lending), OneCard (Mobile-first credit card), Ola (Mobility), Ola Electric(Electric Vehicles), Dailyhunt (Local language platform), OfBusiness (B2B commerce, fintech), Oxyzo (Tech-enabled smart financing), Captain Fresh (B2B seafood marketplace), Country Delight (D2C dairy & fresh foods brand), GoKwik (E-commerce enablement platform), Jupiter (Neobank), MoEngage (Customer engagement platform), Mswipe (Mobile POS), Stanza Living (Tech-enabled student housing platform) and Zupee (Skill-based gaming) among others. The firm has advisory offices in Bangalore, Delhi and Mumbai. Further information is available at www.matrixpartners.in. To know more about our investment philosophy & ideologies, check out the #MatrixMoments podcast series.
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