Saturday, April 13, 2024
HomeStart UpOptimo Loan raises $10 million in funding 

Optimo Loan raises $10 million in funding 

Optimo Loan, a startup focusing on lending to small businesses, has raised $10 million in its first equity funding round from Blume and Omnivore, along with additional investment from Prashant Pitti, the founder.

Previously employed at financial institutions like Capital One and HSBC in the United States, Pitti, the cofounder of publicly listed travel platform Easemytrip, brings his expertise to Optimo.

With Optimo, Pitti aims to address the $530 billion credit gap in MSME lending in India. The company plans to use technology and a phygital distribution model to provide credit to small businesses. Optimo is developing a co-lending platform for MSMEs, incorporating an underwriting method that will provide detailed insights into the financial health of its customers.

“Optimo lending operations commenced in November 2023, and we are scaling swiftly, yet prudently. We aim to establish an asset-light company by primarily leveraging co-lending agreements with banks and larger NBFCs,” said Pitti who will be running this venture parallel to Easemytrip. 

Reihem Roy, partner at Omnivore, highlighted that out of 53 million businesses in need of credit, only 25% of MSMEs have access to formal credit. This underscores the massive opportunity in this space.

“We believe in Optimo’s mission to democratise access to finance for MSMEs in rural India, especially considering their significant contribution of 29% to GDP. To achieve the ambitious goal of elevating this contribution from 4 to 15 Tn over the next 15-20 years, it’s imperative to explore more effective collaboration avenues. Prashant’s rich expertise and network will be invaluable in navigating towards this mission,” said Ashish Fafadia, partner at Blume Ventures.

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