FinAGG Technologies Raises $11M From Blue Orchard, Tata Capital

FinAgg Technologies, which is a cash flow-based supply chain finance start-up has recently raised $11 Million (Around Rs 91 Crore). This funding was led by BlueOrchard and backed by Schroders and Tata Capital. This series A funding also saw participation from the Small Industries Development Bank of India (SIDBI) and FinAgg’s existing investors.

Apart from the equity, the company also secured funds through Non-Convertible Debentures (NCD).

How will these funds be used?

The funds secured by raising capital and debt are aimed at:

Expanding FinAgg’s online and offline presence,
Enhancing global outreach &
Driving product innovation.

The co-founder of FinAgg, Nitin Kohli stated “The money that we have raised will go into bringing disruptive changes in this industry. Our Product and Engineering department is currently working on bringing blockchain to an industry that worked on conventional pen-and-paper underwriting until recently. These new features will help us look at borrowers in a completely different light and make underwriting in this space more meaningful"

What is the business model of FinAgg Technologies?

Started in 2020, FinAGG is a supply chain platform that provides closed-loop credit solutions to MSMEs, distributors, and retailers through its proprietary platform Quick Cash Flow.

Fin Agg gives credit facilities and underwrites loans without utilizing its balance sheet. The company collaborates with different NBFCs like Tata Capital, SIDBI, Aditya Birla Finance, and HDFC Bank to give credit facilities to enterprises, including but not limited to Fast Moving Consumer Goods(FMCG).

Since 2020, FinAgg has partnered with notable brands like PepsiCo, BlueStar, Daikin, HUL, ITC, and leading banks like IDFC First Bank. Their revenue from operations grew to Rs 11.96 crore during the March 23 fiscal year from Rs 3.69 crore in FY22. But the profit decreased to Rs 8.56 lakh in FY23 from Rs 23.81 lakh in FY March 22.

With a workforce of more than 150 people, this fintech startup has previously secured two rounds in 2020 and 2022 through investors like BLinC Invest and Prime Venture Partners.

Till now, the firm has disbursed loans worth more than Rs 5,230 crore to over 85,000 MSMEs till date. Around 20% of these enterprises are led by women entrepreneurs.

How will Tata Capital benefit from investing in FinAgg technologies?

Tata Capital investing in the funding round of Fin Agg technologies has dual benefits.

1)Investing Perspective:

Tata Capital is investing in FinAgg technologies can be a great return on investment as FinAgg has expanded consistently in the last 4 years in the working capital credit space. With this extent of growth in their current operations and the brands they are working with, FinAgg looks like a promising investment and may give a healthy exit to Tata Capital.

2.) Operational Synergies:

Tata Capital and FinAgg technologies belong to the same industry. While Tata Capital has a wide umbrella of business and personal loans, FinAgg Technologies focuses on Working Capital loans for businesses. Both companies often collaborate in their operations. This deal will increase their synergies which can be beneficial to Tata Capital in expanding their operations and making them more efficient.

Should You Invest In Tata Capital Unlisted Shares?

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