Electronica Finance secures $48 m in Series-B funding led by LeapFrog Investments

Electronica Finance Limited (EFL) announced that it agreed upon $48 million of new funding. The equity round was led by LeapFrog Investments, with participation from Aavishkaar Capital.

Encourage Capital, a US-based impact asset manager, was the first institutional equity investor in EFL. Founded in 1990, EFL is known for its MSME financing services.

“The company has grown its assets under management (AUM) by more than 3x over the past five years. AUM now stands at over $480 million and is projected to increase with a compound annual growth rate (CAGR) of around 35 per cent over the next 3 years,” per a statement by EFL.

“The funds secured will strengthen the company’s balance sheet and provide the foundation for another phase of rapid expansion,” it added.

EFL offers products like machine loans, rooftop solar loans and working capital loans, as well as micro loans against property in semi urban and rural India with an aim to provide sustainable financial inclusion.

Shilpa Pophale, Managing Director and CEO, Electronica Finance Limited, said: “With a strong track record and deep expertise in this segment, EFL remains committed to providing technology-based solutions and financial support to MSMEs that are powering India’s unprecedented economic growth. This association with two leading social impact investors can help us support small businesses to thrive and deliver resilient, low-carbon growth.”

Stewart Langdon, Partner, LeapFrog Investments, said: “Electronica Finance Limited is transforming India’s MSME sector through its sustainable financing solutions. Their funding plays a vital role in financial inclusion and climate resilience for small business owners who have long been overlooked by banks. The benefits of these loans go beyond the small business owner, catalysing job creation and supporting households and communities.”

Anurag Agrawal, Partner, Aavishkaar Capital said, “Aavishkaar Capital’s India Fund VI is committed to channel capital to resilient businesses solving large problems and EFL’s diverse portfolio across MSME, climate and rural financing brings significant opportunity to bolster inclusive development. This investment will also underscore our commitment to the 2X Challenge in supporting businesses that promote gender equality and empowerment.”