Team Startupcity

·  Techfino raises Rs 65 crore in equity funding led by Stellaris Venture Partners and Saison Capital to expand MSME loan operations.

·  Plans to double branch network from 30 to 60 and increase workforce to 600 by year-end.

·  Focus on rural India with tech-enabled credit assessment, offering secured loans to small retailers, farmers, and traders.

Bengaluru-headquartered non-banking financial institution (NBFC) Techfino raised  Rs 65 crore in equity capital, co-led by Stellaris Venture Partners and Saison Capital, the venture capital arm of Japan-listed Credit Saison. The new fund will support the company's growth in secured lending business, with a sharp accent on micro and small businesses (MSEs) in India's semi-urban and rural areas.

With plans to double its branch network from 30 to 60 over the next year, Techfino will also ramp up hiring and further enhance its proprietary credit risk assessment platform specially designed to evaluate informal sector borrowers.

"Our profitability from our first full year of operations is a result of asset quality discipline. Our equity infusion is designed to fuel growth through branch-based expansion and hiring - particularly in our MSME loan against property (LAP) vertical," added Rajesh Panda, Co-founder of Techfino.

Established in 2019 by banking alumni Rajesh Panda (former Standard Chartered), Jayaprakash Patra (former ICICI, ING) and Ratikant Satapathy (former Bajaj Finance), the NBFC operates two significant verticals:

- Unsecured education loans, in association with more than 100 schools and colleges

- Secured loans against property, for small and medium enterprises in Tier 2 and Tier 3 cities.

With Assets Under Management (AUM) of  Rs 225 crore, including  Rs 100 crore in its LAP book, Techfino today disburses more than  Rs 10 crore of secured loans a month a figure it expects to double with this current fund raise. The ticket size of the LAP typically varies between  Rs 8–12 lakh and targets borrowers like small shopkeepers, dairy farmers, and street traders in states like Karnataka, Gujarat, Madhya Pradesh, and Andhra Pradesh.

What differentiates Techfino is its income assessment model at the household level. "In rural areas, income tends to be from various members of a family. We account for this in our analysis and construct underwriting scorecards that are customized to local income patterns," Satapathy added.

The firm's infrastructure of technology supports its scalability, the company smoothly integrating APIs for bank information, property verification, and legal due diligence. "Our systems are as efficient at underwriting rural borrowers as urban fintechs," Satapathy further said.

Thus far, Techfino has distributed more than one lakh loans in both lending verticals and is supported by DCB Bank alongside previous backers. It closed out FY25 with  Rs 34 crore in revenue and  Rs 1.5 crore in pre-tax profit. Presently having around 400 employees, the firm aims to ramp up to 600 employees by the end of the year.

While its education finance business grows steadily on an ongoing basis through collaborations with institutions like Manipal and Amity, Techfino is obviously directing its momentum towards MSME secured lending. "Education lending will keep growing at the same pace, but we see tremendous potential in LAP for MSMEs that's where we are heavily investing," said Panda.