Saarathi Finance raises Rs 475 crore funding to bridge the credit gap faced by Indian MSMEs

Saarathi Finance, a newly licensed greenfield non-banking financial company (NBFC) focused on empowering India's micro, small, and medium enterprises (MSMEs), has announced the closure of its inaugural funding round, raising a total of Rs 475 crore.

The firm will use the raised capital to bridge the significant credit gap faced by MSMEs, particularly in underserved semi-urban and rural regions across Tamil Nadu, Telangana, Andhra Pradesh, Karnataka, Rajasthan, and Uttar Pradesh, underpinning the theme of inclusive growth for Bharat. 

The funding round was led by prominent investors, including TVS Capital Funds, Lok Capital, Evolvence Equity Partners, Paragon Partners, and prominent angels collectively contributing ~ Rs 350 crore.

Notably, Vivek Bansal, founder and CEO, and Sunil Daga, co-founder, infused the balance amount. The Series A investment values Saarathi Finance at over Rs 900 crore.

"This funding milestone enables us to accelerate our mission, ensuring every stakeholder, from entrepreneurs to investors, is valued and cared for in our journey. With heartfelt gratitude to our stakeholders, friends, and family, we embark on this exciting journey," Bansal said.

“Saarathi Finance embodies the spirit of inclusive growth that aligns with our vision of supporting micro and nano businesses crucial to India's journey towards a $10 trillion economy. Their focus on MSMEs in underserved regions resonates with our commitment to empowering next-generation entrepreneurs who are the backbone of India's economic development." said Gopal Srinivasan, Chairman and Managing Director, TVS Capital Funds.

“We have been a part of the evolving secured micro- enterprise lending space for over a decade now, and see innovation and capital emerging as serious moats. We are excited to partner with Saarathi as the next generation of market leaders in this space," added Rajat Bansal, Managing Director, Lok Capital.