Omidyar Network, Michael and Susan Dell Foundation invest Rs. 28 crore in IntelleGrow
The funding will be used by the Mumbai-based NBFC to increase its loan book to Rs. 500 crore, up from its current Rs. 50 crore book size.
The funding will be used by the Mumbai-based NBFC to increase its loan book to Rs. 500 crore, up from its current Rs. 50 crore book size. This is the second round of institutional funding for the company which had raised Rs. 10 crore from the Michael and Susan Dell Foundation in February last year.
IntelleGrow, which provides debt, ranging between $100,000 (about Rs. 62 lakh) and $600,000 (about Rs. 3.7 crore) to early-stage ventures that cater to India’s poor, counts companies such as renewable energy venture Husk Power, low-cost ATM manufacturer Vortex Engineering and low-cost hospital chain Vaatsalya Healthcare Solutions in its portfolio.
“We’re trying to establish a new lending infrastructure for early-stage ventures, through debt, rather than equity, which at that stage, is a far more rational option for them,” said Sanjib Jha, CEO of IntelleGrow.
According to Jha, the NBFC will look to fund at least 100 ventures within the next 12 months. At present, it lends to about five startups every month. Almost half its total portfolio features ventures that are between six and 18 months old.
Apart from the promoters, the two year-old IntelleGrow, which has lent to more than 40 startups, is also backed by Intellecap, Shell Foundation and Vineet Rai, founder of social venture firm Aavishkaar. It focuses on lending to startups across six sectors–financial inclusion excluding microfinance, affordable healthcare, agri-supply chains, renewable energy, education and water sanitation.
“Access to debt is very difficult in India, especially for early-stage ventures, given the demands made by the mainstream banking industry, which prefers lending to those ventures that can provide collateral and are profitable. This is where IntelleGrow plays such a big role,” said Dimple Sanghi, director of investments at Omidyar Network.
Omidyar Network has, so far, committed about $120 million (Rs 745.6 crore) in the country.
According to government estimates, India’s 13 lakh small and medium enterprises (SMEs), while employing close to 40% of the country’s workforce, and contributing about 17% of its total GDP, continues to encounter significant hurdles in accessing affordable capital, and faces an estimated credit gap of Rs 90,000 crore.
“We hope there will be more confidence among Indian entrepreneurs to raise money. Debt can play a huge role in pushing entrepreneurship in the country,” said Omidyar’s Sanghi.