Electronica Finance raises $48M in a Series B round led by LeapFrog, Aavishkaar Capital

Electronica Finance Limited (EFL), a Pune-based finance firm, has raised $48 million in a Series B funding round led by LeapFrog Investments and Aavishkaar Capital.

Established in 1990, EFL has distinguished itself through its innovative financing solutions tailored to the MSME sector, a critical engine of India’s economic expansion.

Focusing on the manufacturing sector 

The new funding is set to catalyze EFL’s next growth phase, focusing on the manufacturing sector with high growth potential. EFL is known for its diverse loan offerings, including machine loans, rooftop solar financing, working capital loans, and microloans against property. These financial products aim to promote sustainable financial inclusion and reduce carbon footprints, the company said. 

Through financing over 75,000 machines and championing rooftop solar initiatives, EFL has played a significant role in transitioning its clientele towards less energy-intensive operations, saving over 50,000 metric tonnes of CO2 emissions.

Supporting the growth of Indian MSMEs 

EFL aims to support the robust growth of MSMEs with technology-driven solutions.

“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," said Shilpa, Managing Director & CEO, Electronica Finance Limited.

Addressing the credit gap

Despite their significant contribution to India’s GDP and export sector, MSMEs often face substantial challenges in accessing credit. EFL seeks to bridge this gap, supporting the government's vision for MSMEs to contribute 50% to the GDP and employ 160 million people by 2025. 

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".

Langdon said the benefits of these loans go beyond the small business owner, catalysing job creation and supporting households and communities.