Digital Lender NeoGrowth, a Mumbai-based, MSME-focused lending company, has bagged Rs 85 crore funding with a combination of equity and debt from FMO - the Dutch Development Finance Organisation and current investor LeapFrog Investments. The fresh money investment will enable the company to increase their loan book to Rs 3,000 crore before it needs another equity investment.

Key highlights

• Through equity and debt, Digital Lender NeoGrowth has secured Rs 85 crore funding from FMO and LeapFrog Investments.
• Before its next equity infusion, the Mumbai-based lender has mapped out plans to grow its loan book to almost Rs 3,000 crore.

The latest fundraising comes as technology-led lenders are increasingly turning to digital payment records, transaction history and business cash flows to determine the creditworthiness of micro, small and medium enterprises (MSMEs) which may not have access to traditional sources of financing.

Digital Lender NeoGrowth Targets a Rs 3,000 Crore Loan Book

NeoGrowth is banking the funds to scale its lending business and enhance its loan size to close to Rs 3,000 crore, the company said. The target is an important achievement on its journey towards its growth strategy, in the eyes of the lender, who will only look for a further injection of capital.

The most recent round consists of debt and equity. The transaction involved Dutch development finance institution FMO and an existing investor in NeoGrowth, LeapFrog Investments.

The $1 million raising underscores continuing investor demand for technology-driven lending companies that service small businesses that are underserved, and do so through data and alternative financing structures.

NeoGrowth Previously Raised Rs 300 Crore in Series D Funding

NeoGrowth had previously raised Rs 300 crore, equivalent to approximately $36 million, in a Series D funding round in December 2022. The round was led by FMO, alongside existing investors.

Co-founded in 2011 by Dhruv Khaitan and Piyush Khaitan, the company provides business loans designed around the financing requirements of small enterprises. Its products include both collateral-free and collateral-based loans for MSMEs.

The company's latest capital raise follows its earlier fundraising activity as it looks to strengthen its lending capacity and reach more businesses.

How NeoGrowth Uses Digital Payments Data to Assess MSME Borrowers

NeoGrowth uses technology and data analytics to evaluate borrowers based on digital payment data, point-of-sale (POS) transactions and business cash flows rather than relying solely on conventional collateral.

This approach enables the lender to assess businesses using their transaction activity and cash-flow patterns. Its repayment options include daily, weekly, fortnightly and monthly collections, offering different schedules to suit borrowers' business operations.

The company serves a range of small-business segments, including enterprises that may find it difficult to secure credit through conventional lending channels.

NeoGrowth Serves Businesses Across More Than 25 Indian Cities

NeoGrowth claims to operate in more than 25 cities across India, covering over 80 business segments and serving more than one lakh businesses.

Its lending model focuses on providing credit to MSMEs through technology-enabled assessment and repayment structures. Access to business loans can help small enterprises address working-capital requirements and support day-to-day operations, although individual loan terms depend on the lender's assessment.

Also Read: Indian Startup Funding Reaches $2.9 Billion in Q3

Digital Lenders Attract Investor Interest in India's MSME Credit Market

NeoGrowth's fundraising comes amid continued activity in India's technology-led MSME lending segment.

In February 2026, Prayaan Capital led by Peak XV Partners closed a Rs 110 crore Series A funding for the development of its technology-driven MSME Lending Platform. GetVantage raised Rs 63 crore in the August 2026 round of its Series A1 financing round for its cash flow based financing platform for businesses.

Business Nextgen Finance also raised Rs 215 crore in equity to augment its technology-driven secured lending platform for MSMEs which are under-served. Previously, FlexiLoans raised Rs 375 crore in a Series C round in June 2025 and Techfino raised Rs 65 crore to expand its tech-based lending business in small towns and cities in June 2025.

Digital lenders are also increasingly relying on how loans are paid for digitally as well as on GST records and banking transactions to assess loans. These data-led approaches are expanding the range of information available for credit assessment, particularly for small businesses with limited conventional credit histories.

For NeoGrowth, the immediate priority is to deploy the fresh capital towards its stated loan-book target of nearly Rs 3,000 crore. The company's progress towards that milestone will be an important indicator of its lending expansion before its next planned equity infusion.