SME Lending Startup Kinara Capital Raises $5 Mn in Debt Funding

Bangalore-based SME Lending Startup Kinara Capital has raised Rs 32 crore in non-convertible debentures. The funding has been raised from Zurich, Switzerland-based responsAbility Investments, an asset manager which specialises in investment solutions to supply debt and equity financing predominantly to non-listed firms in emerging and developing economies.

Jaskirat Chadha, senior investment officer, responsAbility, said, “responsAbility-managed funds have been providing funding for financial institutions targeting micro, small and medium-sized enterprises for the past 15 years. Kinara Capital is a successful player in the inclusive finance area that actively contributes to driving economic growth as well as increasing the standard of living of large sections of the population.”

Kinara Capital, which is operated by Visage Holdings and Finance Pvt. Ltd was founded in 2011 by former Accenture senior executive Hardika Shah. It provides financing of USD $2,000 to $20,000 to small-to-medium enterprises (SME) in India with a turnover of less than Rs.2 Crores, filling the gap between microfinance and commercial capital.

The company is focused on lending to growing businesses (usually 2-20 employees) that require funding for working capital, capital assets, and start-up needs. The focus industries include agri-products, handicraft production, water, food, and energy. As on June 2018, the startup has serviced 15,000-plus customers in six states and manages a portfolio of approximately Rs 450 crores.

Kinara Capital is backed by marquee investors Gaja Capital, GAWA Capital, Patamar Capital, and Michael & Susan Dell Foundation. It has earlier raised Rs 96 crore ($14.7 million) from mid-market private equity firm Gaja Capital, GAWA Capital and existing investors Patamar Capital and Michael & Susan Dell Foundation, in October 2017, followed by $14.5 million funding in Series C round, in November of the same year.

Founded in 2003, ResponsAbility has assets under management invested in over 540 companies in 90 countries.

Last year, ResponsAbility along with Belgium-based Incofin Investment Management had invested $20 million (nearly Rs 130 crore) in Sohan Lal Commodity Management Pvt. Ltd, a Delhi-based farm logistics services provider. Its other bets in India include biomass aggregator Punjab Renewable Energy Systems, sanitary services provider Saraplast Pvt. Ltd and BPO service provider DesiCrew Solutions Pvt Ltd.