Lending fintech firm U GRO Capital has announced its second capital raise since its formation in July 2018.
The company's board of directors approved a preferential allotment of INR 240 Cr to IFU (Investeringsfonden for Udviklingslande) through its Danish Sustainable Development Goals Investment Fund K/S, subject to customary closing conditions, including regulatory and shareholder approvals.
UGRO Capital is simultaneously raising up to INR 101 Cr from long-term shareholders, such as insurance companies, AIF, and other financial institutions through a Qualified Institutions Placement (QIP) of up to INR 101 Cr.
IFU is an independent Danish government-owned fund that offers risk capital to companies in developing countries and emerging markets and is an impact investor which invests to support sustainable development in developing countries and contribute to the realization of the SDGs by creating better opportunities for people in low and middle-income countries. The growth capital from the funds raised will primarily be used for onward lending, which will assist the MSME segment and take credit to the last mile. This capital raise will further enhance UGRO Capital's strong capital position and strengthen the balance sheet.
UGRO Capital aims to gain a one per cent market share with 1 million small businesses. Commenting on the fundraising announcement, Shachindra Nath, Vice Chairman and Managing Director of UGRO Capital, said, "We have seen multiple FinTech and NBFCs that were created as private ventures and then being floated in the Public Market at a significant premium. It was our desire to create an institutionally owned, independently supervised, and professionally managed FinTech in the listed world so that the opportunity is available to the large universe of Public Market Institutional Investors, HNIs, AIFs, PMS, and Retail Investors."
With this latest capital raise, UGRO Capital is poised to continue its mission of changing the lives of small businesses and achieving its goals at an accelerated pace, thanks to a global development financial institution like IFU as a partner.