IntelleGrow, a Mumbai-based financing company for small and medium social enterprises, today announced that it has raised INR 250 million from Omidyar Network and INR 30 million from the Michael & Susan Dell Foundation. This new investment follows founding investments from the Shell Foundation, the Michael & Susan Dell Foundation, and Intellecap, and these new funds will be used to help Indian enterprises access capital for growth.
A 2012 report by IFC and Intellecap showed that one of the biggest challenges faced by the small and medium enterprise (SME) sector is the availability of adequate and timely finance. Despite the key economic role SMEs play, including a contribution of almost 22% to the GDP of India (35% to manufacturing output and 40% to exports), over 37% of the overall debt required from SMEs cannot be serviced by existing financial institutions. Most formal lenders typically engage in traditional collateral-based lending to enterprises operating in established industries and require at least three years of profitable track record, placing debt financing out of reach for many innovative new companies.
To date, IntelleGrow has disbursed more than 60 loans, totaling more than INR 600 million to SMEs across India. Promoted by Intellecap, and registered as a Non-Banking Finance Company (NBFC), IntelleGrow uses a unique model that unlocks capital for innovative entrepreneurs. IntelleGrow’s investee companies could deliver sustainable large-scale impact to help solve India’s development challenges, but they previously lacked access to the right type and timing of finance in order to achieve their full growth potential. IntelleGrow helps fill that need.
IntelleGrow provides viability-based debt financing to fast growing early-stage enterprises with a turnover of less than INR 500 million and at least 12 months of track record. IntelleGrow provides customised financing solutions using flexible repayment schedules linked to cash flows. Coupled with fast turn-around times, IntelleGrow’s process and approach innovations remove barriers to the growth of small and medium enterprises in India.
- 100% of the entrepreneurs that IntelleGrow has supported are first generation entrepreneurs and among them 45% of the enterprises are start-ups.
- IntelleGrow is a first lender to more than 70% of our borrowers, and lending has leveraged an additional INR 7000 million in investment in these companies;
- 25% of IntelleGrow’s portfolio companies engage suppliers and producers from low-income community and also employ workers from low income and underserved communities.
Commenting on the investment:
Sanjib Jha, CEO and Director, IntelleGrow said, “Businesses in their early stages need debt at the right time to sustain and create value and not only just be dependent upon equity. Our offering in the form of venture debt creates value for promoters and investors and helps multiply the social impact. We know there are literally hundreds of worthy companies to meet and engage with in India. Unlocking capital for these companies means unlocking solutions to India’s development challenges. With investment from Omidyar Network, we have found a new partner in this work – a partner that endorses our model and our track-record and joins other notable investors like Michael & Susan Dell Foundation.”
Vineet Rai, Founder, Intellecap, and Promoter, IntelleGrow welcomed the investment by Omidyar Network and renewed investment from Michael & Susan Dell Foundation. He said: “IntelleGrow’s pioneering approach to risk taking has yielded early positive results for stimulating growth of small and growing businesses. These investments from Omidyar and Michael & Susan Dell Foundation, strengthen our resolve to further our lending portfolio so that we may be able to support more entrepreneurs.”