MSME-concentrate CFNB Finova Capital has raised $135 million in a Series E round from Avataar Venture Partners, Sofina and Madison India Capital, with existing investor Norwest Venture Partners also participating in the round.

They join the captable alongside existing investors – Peak XV Partners, Faering Capital and Maj Invest. The transaction also offers a partial exit to early investors. This is also Avataar’s first investment in the financial services sector in India.

Finova will use the funds to grow its loan portfolio, invest in technology, expand geographically and deepen its vision of enabling financial inclusion at scale.

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Finova Capital leverages technology to develop products aimed at micro-entrepreneurs and semi-skilled professionals (largely in the service sector), who typically do not have or have limited access to loans from formal financial institutions.

Founded in 2015 by Mohit and Sunita Sahney, Finova Capital is present in 16 states with 400+ branches and has served 1 lac+ clients.

The current AUM is around ₹3,000 crore, representing a 5-year CAGR of over 60%. The technology stack is focused on Finova’s customer segment and internal domain expertise, and helps the company target unique and untapped customer profiles and leverage its proprietary underwriting and risk assessment processes .

Mohit Sahney, Founder and Managing Director of Finova, said: “Their confidence in our ability to enable financial inclusion across the country and empower entrepreneurs at the heart of Bharat has invigorated our commitment to creating one of the largest technology-driven financial services companies in India. »

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