Published: October 9, 2026
StartupFeed Quick Take
- NeoGrowth funding: ₹85 crore from FMO and LeapFrog Investments, with nearly 70% (about ₹60 crore) coming in as equity and the rest, around ₹25 crore, as debt.
- It is a follow-on. FMO first bought equity in the Mumbai lender in December 2022, for ₹160 crore, and has lent to it since 2017.
- The raise follows strain. NeoGrowth breached covenants tied to 55% of its borrowings as of June 2025 and won relief from some lenders.
Mumbai lender NeoGrowth Credit has raised ₹85 crore from Dutch development bank FMO and LeapFrog Investments, with nearly 70% of it coming in as equity.
Regulatory filings reported on October 9 show the split: about ₹60 crore of equity and roughly ₹25 crore of debt. FMO is the lead, following its first NeoGrowth equity cheque of ₹160 crore in December 2022.
The timing matters. NeoGrowth has been under strain. It had breached financial covenants tied to 55% of its borrowings by June 2025, an ICRA review shows, and secured temporary relief from some lenders.
NeoGrowth lends to shopkeepers and small merchants, scoring them on their daily card and digital payment sales. Founders Dhruv Khaitan and Piyush Khaitan have run the non-banking lender (NBFC) since 2013, serving more than 400,000 customers across 70-plus segments. The fresh equity shores up its capital base so it can lend again.
Why FMO Is Deepening Its NeoGrowth Funding
FMO started as a NeoGrowth lender in 2017 and became a shareholder in December 2022 with that ₹160 crore cheque. Other backers include Omidyar Network, Lightrock, Quona Capital and WestBridge, long-standing investors in the business.
The segment around it has tightened. Many MSME fintech lenders saw loan books shrink in FY26, so a development bank writing a fresh equity cheque is a signal worth reading. For NeoGrowth, the money buys room to lend after a year of covenant pressure.
What this means for you: If you run a small business that borrows from fintech lenders, fresh equity into NeoGrowth signals capital is still flowing to a strained segment. Watch whether NeoGrowth now restarts lending; MSME loan books shrank in FY26, so new capital could ease credit for borrowers.
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