Prayaan Capital raises Rs 110 Cr in Series A led by Peak XV Partners

MSME-focused lending platform Prayaan Capital has raised Rs 110 crore in its Series A funding round led by Peak XV Partners.

Prayaan Capital will use the new funding to build its lending platform, strengthen its leadership team, and expand into key MSME markets across India. The NBFC is led by Rangarajan Krishnan, former Joint Managing Director and CEO of Five-Star Business Finance.

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Krishnan recently bought a controlling stake in Prayaan Capital and is now guiding the company toward a technology-first approach. The platform plans to combine strong on-ground underwriting experience with digital tools for sourcing, credit checks, and collections. Its main goal is to support underserved micro, small, and medium enterprises (MSMEs) in India, a segment that faces a credit gap of nearly $300 billion.

Rangarajan Krishnan, Promoter, Prayaan Capital, said "Small businesses are the backbone of India’s economy, yet millions remain underserved by formal credit. Prayaan Capital is built on the belief that combining deep customer understanding with technology can meaningfully expand access.”

Peak XV Managing Director G V Ravishankar said, "We have known Ranga for over 15 years, and our partnership has been shaped by a shared commitment to expanding access to credit for small businesses. He and his team bring deep experience and a genuine obsession with serving this segment well.”

According to Prayaan Capital, India has around 70 million MSMEs that employ nearly 300 million people. Even though these businesses play a major role in economic growth and job creation, many small entrepreneurs still struggle to get formal loans.

Prayaan Capital plans to solve this problem by building an institution that combines branch-based distribution with data-driven credit assessment and strong operational processes.

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