$8.5M Investment Led by Lok Capital and Matrix Partners India into Seeds Fincap

New Delhi: Seeds Fincap Pvt. Ltd., a Gurugram based Non-Banking Financial Company (NBFC), has successfully raised over $8.5 million in a Series .A funding round led by Lok Capital and Matrix Partners India. This significant investment will empower Seeds Fincap to enhance its lending capabilities, upgrade its technological infrastructure, and expand its branch network across India, aiming to better serve the country’s micro, small, and medium enterprises (MSMEs).

Addressing the MSME Credit Deficit

India’s MSME sector, a crucial component of the nation’s economy, faces a staggering credit deficit exceeding ₹8 trillion. These businesses, which include manufacturing, trading, and allied services, often find themselves underserved by traditional financial institutions. Seeds Fincap is committed to bridging this gap by providing specialized credit products tailored to the unique needs of MSMEs. The company offers both secured and unsecured loans ranging from ₹1-5 lakhs, employing a rigorous credit assessment process and leveraging advanced technology to manage risks and reduce operational costs.

Rapid Growth and Impact

Since its establishment in 2021 by Subhash Acharya and Avishek Sarkar, Seeds Fincap has experienced rapid growth. The NBFC now operates 90 branches across eight states, including Uttar Pradesh, Bihar, Rajasthan, and Haryana. Over the past three years, Seeds Fincap has disbursed loans totaling more than ₹600 crore, serving over 50,000 customers and growing its loan book to over ₹330 crore. The company has also diversified its liability base with more than 35 lending partners, including AU Small Finance Bank, Tata Capital, IDFC Bank, Yes Bank, and Vivriti Capital.

Founders’ Insights

Subhash Acharya, Managing Director and Co-founder of Seeds Fincap, highlighted the underserved nature of MSMEs in India. He stated, “MSMEs in India continue to be underserved on credit, often overlooked by incumbent financial institutions. At Seeds Fincap, we’ve developed a unique credit evaluation framework supported by a tech-enabled sourcing-to-collections process designed to empower enterprises with tailored financial solutions. Our partnership with investors, Matrix Partners India and Lok Capital, signifies a shared dedication to unlocking the immense potential within the MSME segment. This funding will not only fuel our expansion efforts but, more importantly, empower the dreams of our clients—the gritty entrepreneurs propelling India’s economic engine forward.”

Avishek Sarkar, Co-founder of Seeds Fincap, echoed this sentiment, adding, “Our clients range from traders, small kirana shops, owners of micro-manufacturing units, and allied service providers, all of whom play a vital role in India’s growth story. Most of them have working capital requirements and often struggle to access right-priced and timely credit. At Seeds Fincap, we provide a variety of credit products to meet these needs. Over the last three years, we have developed expertise in assessing their cash flows and underwriting these businesses.”

Investor Perspective

Vikram Vaidyanathan, Managing Director of Matrix Partners India, expressed confidence in the potential of MSME credit in India, noting the massive opportunity as India scales towards becoming a $10 trillion economy. Rajat Bansal, Director at Lok Capital, also emphasized their commitment to supporting Seeds Fincap’s mission and growth prospects.

Future Plans

With this new funding, Seeds Fincap intends to scale its lending book, diversify into newer products, and expand its branch network. The company aims to further penetrate the MSME market and provide essential financial services to small businesses across India. By addressing the credit needs of MSMEs, Seeds Fincap is set to play a crucial role in supporting the growth and sustainability of this vital sector, ultimately contributing to India’s economic development.

The $8.5 million investment led by Lok Capital and Matrix Partners India marks a significant milestone for Seeds Fincap. It not only provides the financial backing needed for expansion but also signifies a strong vote of confidence in the company’s mission and operational strategy. As Seeds Fincap continues to grow, it remains steadfast in its commitment to empowering India’s MSMEs, driving economic growth, and fostering entrepreneurial dreams across the nation.