With Robust Backing from Sequoia, this Fintech Startup Aims to Redefine lending for the Unorganized Sector
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In March this year, early-stage Finance startup Finova Capital wooed investment major Sequoia Capital to participate in a second tranche Series A round that saw as much as USD 6 Million being raised. Now, the latest round of funding assumes significance considering the fact that Finova Capital (which is NBFC Licensed by the Reserve Bank of India) was founded in 2016 and has so far managed to raise a consolidated venture capital (VC) of INR 52 crores.
In this regard, Entrepreneur India interacted with Mohit Sahney who is Founder and CEO at Jaipur-based Finova.
“We are NBFC focussed on MSME space & do funding in small tickets & in smaller semi urban, rural markets,” states Sahney to Entrepreneur India.
The Funding journey of Finova
As per Sahney, Finova Capital has managed to raise INR 52 crores as consolidated capital; with INR 38 crores amounting to VC funds raised through Sequoia Capital.
“Sequoia has given us venture capital, and we are working with as many as thirteen investors who have lent us debt,” explains Sahney.
Now, it is worth noting that Sequoia’s GV Ravishankar has also mentored Finova apart from just having invested venture capital on the startup.
As far as connecting with Sequoia is concerned, Sahney explains that it was his earlier stint at ICICI Home Finance that enabled him to clearly analyse the mortgage business.
“Looking at my experience, and the huge unmet demand in the MSME domain, Sequoia Capital decided to invest in us,” explains Sahney.
Sahney explains that Finova Capital, since its inception, has been profitable; which helped to connect better with Sequoia.
“We don’t believe in burning cash. For us, income is first and then comes expense,” informs Sahney.
Developing the right technology-driven models
With today’s investors taking keen interest on the technology focus of new ventures, Sahney states that the startup’s domain-specific templates that helps address credit worthiness within unorganized segments served as the icing on the cake with respect to getting funded.
Sahney believes that with India’s heterogeneous market nature, there has to be an amalgamation of both Fintech as well as conventional approaches when it comes to the financial sector. He states that venture capital funds are always seeking the right entrepreneurs with the right models.
For new entrants, Sahney’s recommendation is to focus on making businesses self-sustainable. He advises entrepreneurs to develop long-term plans and think professionally focussing on wealth creation.
“Always remember that corporate governance and compliance is a must, and there are no shortcuts,” he signs-off.