Loan-against-property lender Optimo Capital has raised $17.5 million in a new round of funding led by the startup’s founder Prashant Pitti with participation from existing investors Blume Ventures and impact venture capital firm Omnivore.
Alongside the equity raise, the non-banking financial services startup has also raised just under $12.5 million in debt from IDFC Bank and Axis Bank.
With the new round, Optimo’s total equity fundraising stands at $27.5 million.
The Blume-backed company targets medium and small business entrepreneurs in tier-2 and tier-3 cities of India providing them loans against commercial or residential property as collateral. Such loans are typically extended at lower rates compared to unsecured or personal loan products.
The fresh funds will be used to expand presence, Prashant Pitti, founder and managing director at Optimo Capital told Mint. “We want to be in six more cities by the end of the fiscal year and have 80 branches in total.” He added that expansion to the north and western parts of India is part of next year’s roadmap.
Currently, the startup has branches across 56 cities in Karnataka, Tamil Nadu, Telangana, Andhra Pradesh, and Madhya Pradesh.
The NBFC’s assets under management currently stands at ₹350 crore and is targeting ₹700 crore by the end of FY26.
Banks such as HDFC Bank, State Bank of India, ICICI Bank and Axis Bank have traditionally provided loans against property. A few startups are trying to carve out their presence in the space. These include InCred, Kishht (which launched LAP services in March), Money View and Electronica Finance Ltd.
AI at play
Some part of the new capital will go to deepen its technology infrastructure, especially its artificial intelligence (AI) capabilities. As part of its existing technology stack, the company uses 7.7 million digital land records in conjunction with AI to disburse loans quicker.
“We’re running an AI agent to chat with people looking for loans to help them quickly get the construction value of their homes so we can help them get the loans quicker,” said Pitti.
Over the past five years, commercial credit portfolio balances have grown at a compound annual growth rate (CAGR) of 13% to reach ₹35.2 trillion as of March this year, according to the Small Industries Development Bank of India’s MSME Pulse report from June.
While private banks and public sector banks have dominated a large chunk of the market, accounting for 43% and 34% of the portfolio balance, NBFC’s which hold 11% have grown the fastest, at a CAGR of 19%.
Optimo Capital is Pitti’s third outing as an entrepreneur, his last venture was as co-founder of bootstrapped online travel company EaseMyTrip, which he helped take public in 2021. Pitti announced Optimo Capital in 2023 and raised $10 million in seed funding from Blume and Omnivore last year. In August this year, he resigned from the role of managing director at EaseMyTrip.
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