Madhya Pradesh-based NBFC startup Finodaya Capital raises $2.5 million fund (approximately INR 21.3 Cr) in a seed funding round led by White Venture Capital. This milestone marks a major leap in the company’s journey to bridge the financing gap for India’s underserved micro and nano enterprises. Gemba Capital and a group of seasoned angel investors also joined the funding round. The latest investment values the company at INR 50 crore post-money, setting a strong valuation benchmark for early-stage NBFCs in India.
Finodaya, recently licensed by the Reserve Bank of India (RBI) as a Non-Banking Financial Company, is preparing to serve a rapidly growing segment of small businesses with secured microloans. It adopts a hybrid approach—blending physical branches with robust digital underwriting—to ensure customer-friendly loan processing. The startup targets micro-enterprises that remain outside the purview of traditional banking.
Founded by three former ICICI Bank executives—Neeraj Biyani, Abhitabh Dixit, and Lokendra Tomar—Finodaya Capital leverages deep banking experience, strong credit modeling, and data analytics to tailor lending services. Within six months, the team plans to launch 15 branches across Madhya Pradesh and disburse INR 50–100 crore by 2026.
The funding will allow Finodaya to scale its secured lending model, expand physical operations, and enhance its tech stack. The company’s goal is to offer a transparent, customer-centric credit platform that facilitates the transition of borrowers into the formal economy.
This funding comes amidst a broader movement of NBFCs and fintechs gaining momentum in India. With increasing competition and RBI tightening compliance, Finodaya’s strong regulatory footing and targeted lending model make it one to watch in the Indian financial startup ecosystem. As business funding news continues to trend upward, Finodaya Capital’s strategic vision exemplifies how emerging startups can innovate in deeply traditional sectors like finance.
1. Finodaya Raises Fund: Disrupting Credit Access for India’s Small Businesses
1.1 Understanding Finodaya’s Business Model
Finodaya Capital operates as a Non-Banking Financial Company (NBFC), recently licensed by the Reserve Bank of India on April 11. Its model combines the best of digital and physical—using digital tools for credit evaluation and disbursal, while maintaining physical branches to build trust among underserved micro-entrepreneurs. This “High Touch – High Tech” approach is tailored for micro and nano enterprises that require personalized engagement alongside efficient processing.
Its core offering is secured loans against property, focusing on microloans for small business owners who typically lack access to formal credit. The company’s model relies heavily on data analytics and credit scoring to reduce risk while expanding outreach to financially excluded demographics.
1.2 Revenue Streams and Market Positioning
The revenue model revolves around interest income from secured loans, with future plans for fee-based services such as co-lending facilitation and credit advisory. Finodaya positions itself at the intersection of formal finance and underserved enterprise sectors. By supporting microenterprises in semi-urban and rural markets, it aims to create a large, loyal customer base.
1.3 Background of the Founders
Neeraj Biyani, Abhitabh Dixit, and Lokendra Tomar—seasoned ICICI Bank executives—bring decades of collective experience in banking, risk management, and consumer finance. Their exposure to credit markets and banking operations shapes Finodaya’s customer-first approach.
The previous stints allowed them to understand the structural credit gaps for small businesses. Their new venture aims to fill that void through a regulated, tech-enabled, and ethical lending model.
1.4 Founding Journey and Vision
Before receiving its NBFC license, Finodaya functioned as a business correspondent for Utkarsh Small Finance Bank. This phase offered on-ground exposure and customer insight. With the new license, the company transitions to independent lending while exploring co-lending models with established institutions.
Its stated mission is to foster a transparent and fair credit ecosystem for India’s smallest enterprises. With this seed funding, Finodaya is poised to scale responsibly and impactfully.
2. Strategic Impact of the $2.5 Mn Investment
2.1 Finodaya Raises Fund to Scale Phygital NBFC Model
The infusion of $2.5 million from White Venture Capital, Gemba Capital, and angel investors gives Finodaya a significant boost. The startup plans to open 15 branches in Madhya Pradesh over the next six months and deploy INR 50–100 crore in loans by 2026.
This capital injection will strengthen tech infrastructure, improve branch outreach, and streamline credit disbursals. Importantly, it sets the stage for future rounds of fundraising, positioning Finodaya as a growth-ready NBFC in India’s emerging fintech landscape.
2.2 Competitive Landscape and Industry Movements
India’s NBFC space has witnessed aggressive activity. TapFin launched an NBFC for cleantech lending. Jio Financial Services invested INR 1,000 crore into its NBFC arm. Vayana and Kuhoo Finance received RBI licenses. Spinny raised $131 million for NBFC expansion. Meanwhile, CRED is investing INR 550 crore into its NBFC Newtap Finance.
Amidst this, RBI has also increased compliance checks and penalized several NBFCs over non-adherence. Finodaya’s timing is strategic—it enters the market with strong regulatory compliance and a niche focus.
2.3 Broader Economic Relevance
India’s credit market for microenterprises remains underpenetrated. While fintech innovations abound, trust and physical presence still matter, especially in Tier II and Tier III cities. Finodaya’s hybrid model can become a template for ethical, scalable, and tech-driven microfinance.
By improving credit access to small businesses, Finodaya contributes to inclusive economic growth, supporting employment and formalization.
3. Learning for Startups and Entrepreneurs
3.1 Carve Out a Niche
Finodaya shows the power of niche targeting. Instead of competing with large banks, it focuses on microenterprises—a high-demand, low-supply segment.
3.2 Combine Technology with Human Touch
The company’s phygital model—balancing digital credit scoring with personal engagement—sets a benchmark for customer-first fintech models.
3.3 Focus on Compliance
Launching with a strong regulatory base, Finodaya avoids pitfalls seen in peers penalized by RBI. Compliance is not optional; it’s foundational.
3.4 Build on Experience
The founding team’s background ensures domain expertise. Startups with experienced founders can often execute faster and better.
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