NeoGrowth Raises ₹85 Crore from FMO and LeapFrog Investments to Expand MSME Lending in India
NeoGrowth, an India-based digital lending company focused on micro, small and medium enterprises (MSMEs), has raised ₹85 crore in a fresh investment round led by FMO, the Dutch entrepreneurial development bank, with participation from existing investor LeapFrog Investments. The investment is expected to support the company’s next phase of growth, strengthen its technology-driven lending capabilities and expand access to formal credit for small businesses across India.
The funding comes as NeoGrowth continues to scale its lending operations and strengthen its position in India’s digital financial services sector. The company primarily serves consumer-facing businesses, including retailers, restaurants, cafés and other small enterprises that may face difficulties obtaining conventional bank financing.
Funding to Support Business Expansion
According to reports published on October 9, 2026, the ₹85 crore investment comprises a combination of equity and debt, with equity accounting for nearly 70% of the round, according to the company’s management. The capital is expected to help NeoGrowth expand its lending portfolio, improve its digital infrastructure and reach more underserved entrepreneurs.
Access to finance remains an important challenge for India’s MSME sector. Smaller businesses often have limited collateral, shorter credit histories or financial records that do not fully reflect their day-to-day business performance. Technology-driven lenders such as NeoGrowth seek to address these challenges through alternative credit assessment methods and flexible loan products.
Technology-Driven Lending Model
Founded by Dhruv Khaitan and Piyush Khaitan, NeoGrowth uses data science and technology to assess business performance and creditworthiness. Its lending model incorporates business and digital payment data to help evaluate borrowers who may not meet the conventional requirements of traditional lenders.
The company offers business financing across a wide range of sectors, with repayment options designed to accommodate the operating patterns of small businesses. Its technology-led approach also supports underwriting, portfolio monitoring and risk management.
NeoGrowth has continued investing in proprietary, AI-powered initiatives intended to improve lending decisions and strengthen its ability to monitor loan portfolios as the business grows.
Strengthening Its Presence Across India
NeoGrowth reported assets under management (AUM) of nearly ₹2,000 crore and cumulative loan disbursements exceeding ₹16,000 crore. During the financial year 2025–26, the company added 17 branches, bringing its total distribution network to 46 locations.
The lender also raised close to ₹2,000 crore in debt funding from 18 lenders between April 2025 and July 2026, reflecting its efforts to diversify funding sources and support lending activity.
The latest investment builds on NeoGrowth’s existing relationships with institutional investors, including FMO and LeapFrog Investments, alongside other investors such as Omidyar Network, Lightrock, Khosla Impact and Quona Capital.
Investor Confidence in Financial Inclusion
FMO has supported NeoGrowth since 2017 and previously invested in the company through equity financing. Its continued participation reflects an ongoing focus on expanding financial services for underserved businesses and promoting inclusive economic growth.
For LeapFrog Investments, continued participation in the lender aligns with its broader investment focus on businesses delivering financial services to underserved consumers and enterprises in emerging markets.
The new capital is expected to help NeoGrowth extend its reach among small-business owners while continuing to develop its technology and risk-management capabilities.
Outlook for India’s Digital Lending Sector
India’s MSME sector plays a significant role in employment generation, entrepreneurship and economic activity. However, financing gaps continue to create challenges for businesses seeking to expand operations, purchase inventory, invest in equipment or manage working capital.
Digital lenders are increasingly using data analytics and technology to make credit assessment more accessible and efficient. At the same time, sustainable growth in the sector will depend on responsible lending practices, sound risk management and borrowers’ ability to repay loans.
NeoGrowth’s latest ₹85 crore investment provides additional capital to pursue its expansion strategy. Its progress will depend on how effectively it converts the new funding into responsible lending growth, stronger operational capabilities and improved access to finance for India’s small businesses.
