Chennai, October 03, 2025 — Non-banking financial company (NBFC) GrowXCD Finance has raised ₹200 crore in fresh equity funding, underscoring rising investor confidence in India’s fast-growing micro, small, and medium enterprise (MSME) lending space. The round was led by Blue Earth Capital, with participation from Prosus Ventures, and existing investors Lok Capital and UC Impower.

The funding marks GrowXCD’s second equity raise in 2025, highlighting both strong investor appetite and belief in its branch-first, technology-driven model for extending credit to underserved borrowers.

Investor Participation and Shareholding

Blue Earth Capital led the round with the largest investment, emerging as a key partner in GrowXCD’s growth journey. Prosus Ventures also joined the round, signaling confidence in the NBFC’s potential to scale.

Longtime supporter Lok Capital, which first backed the company in 2023, doubled down on its commitment with fresh capital and now stands as the largest institutional shareholder. UC Impower also followed on, providing continuity of support as GrowXCD sets its sights on wider expansion.

Industry observers note that the diverse mix of global and domestic backers strengthens GrowXCD’s balance sheet while offering a network of strategic partners.

Founder’s Vision: Branch-First Growth Backed by Technology

Co-founder and Managing Director Arjun Muralidharan outlined how the new funds will be deployed. The capital infusion will be directed toward three key areas:

1. Expanding the branch network in existing and new geographies.
2. Strengthening technology infrastructure for underwriting and risk management.
3. Scaling the loan book, with a focus on MSMEs and salaried borrowers in smaller towns.

According to Muralidharan, the fresh capital will comfortably sustain operations for the next 12 to 18 months, providing sufficient runway for GrowXCD to prepare for its next phase of growth.

Current Footprint and AUM

Founded in 2022 and headquartered in Chennai, GrowXCD Finance has built a significant presence in southern India in just three years. The company operates over 60 branches across Tamil Nadu, Karnataka, Andhra Pradesh, Telangana, and Puducherry.

Its assets under management (AUM) currently stand at approximately ₹300 crore, with a publicly stated target of reaching ₹500 crore by March 2026. The company’s portfolio primarily serves micro, small, and marginal enterprises, along with salaried individuals who often fall outside the traditional credit net.

With a reported collection efficiency of over 99%, GrowXCD has demonstrated robust risk management practices even as it scales.

Expansion Plans Beyond South India

While South India has been GrowXCD’s stronghold, the management has signaled clear ambitions to grow into new markets across central and northern India.

By March 2027, the company aims to add 40–50 new branches and expand into Madhya Pradesh, Maharashtra, and Uttar Pradesh. This transition from being a regional player to a pan-India NBFC reflects its broader ambitions to become a significant player in India’s MSME lending ecosystem.

Why MSME Lending Matters

The importance of GrowXCD’s mission lies in its focus on MSMEs—an economic segment that contributes nearly 30% of India’s GDP and 40% of exports, yet faces chronic credit shortages.

Traditional banks, particularly in tier-II and tier-III towns, often hesitate to lend to MSMEs due to their lack of formal documentation or credit history. This has left a vast financing gap, estimated at over ₹20 lakh crore, according to industry reports.

NBFCs like GrowXCD are stepping in to fill this void with:

• Branch-first outreach, ensuring physical presence in underserved markets.
• Tech-enabled underwriting, which uses alternative data points to assess creditworthiness.
• Customized products that suit the needs of small enterprises and individuals outside the formal banking radar.

Investor Confidence and Market Significance

The latest funding round underscores investor confidence in this approach. Blue Earth Capital’s leadership role reflects strong conviction in GrowXCD’s strategy, while Prosus Ventures’ participation shows growing global interest in Indian financial inclusion models.

Lok Capital’s increasing shareholding signals long-term faith in GrowXCD’s vision, while UC Impower’s continued backing strengthens the institutional support base.

Industry experts caution, however, that scaling beyond South India will pose new challenges. Differences in borrower behavior, market maturity, and competitive dynamics across regions mean that GrowXCD must tailor its strategies to succeed in new states. Loan quality and operational risk management will be under scrutiny as the company expands.

Shaping India’s Credit Ecosystem

The funding announcement is not merely about one company’s growth but represents a broader trend in India’s credit ecosystem. By focusing on underserved borrowers, firms like GrowXCD are driving inclusive finance and demonstrating that MSME lending can be both impactful and profitable.

If GrowXCD succeeds in executing its plans, it could become a name to watch in India’s rapidly evolving lending sector. With a strong capital base, investor backing, and a clear expansion roadmap, the company is well-positioned to play a meaningful role in reshaping access to credit for small businesses and individuals across the country.

Conclusion

The ₹200 crore equity raise by GrowXCD Finance signals a milestone not just for the company but for the broader MSME lending sector in India. Backed by global investors and a strong operational track record, GrowXCD is set to expand its footprint, enhance its technology stack, and deepen its loan book.

As India’s financial ecosystem increasingly embraces inclusive lending models, the success of players like GrowXCD could determine how quickly credit access improves for millions of small businesses and individuals left out of the traditional banking framework.

For now, all eyes will be on whether GrowXCD can translate investor confidence into sustainable growth as it charts its journey from a southern stronghold to a national lending powerhouse.

References

1. Economic Times – “Blue Earth leads Rs 200 crore investment in GrowXCD”
2. VCCircle – “Blue Earth Capital, Prosus, others invest in SME lender GrowXCD Finance”
3. Prosus – “GrowXCD Finance secures ~INR 200 Cr funding”
4. DealStreetAsia – “India’s GrowXCD Finance raises $22.8m funding led by Blue Earth, Prosus”

Disclaimer: This article is based on information available from public sources. It has not been reported by EQMint journalists. EQMint has compiled and presented the content for informational purposes only and does not guarantee its accuracy or completeness. Readers are advised to verify details independently before relying on them.