Premji Invest, Norwest and Lok Capital invest ₹1,000 crore in Vegafin

What happened

Artificial intelligence-driven lending platform Vegafin has secured up to ₹1,000 crore ($106 million) in funding from a consortium comprising Premji Invest, Norwest Venture Partners, and Lok Capital.

The investment will back Vegafin’s acquisition of a majority stake in Gurugram-based non-banking financial company (NBFC) Bizloan, subject to regulatory approvals. Founded by former ICICI Bank executive Bijith Bhaskar, Vegafin plans to deploy the capital to build a hybrid 'phygital' platform that pairs AI-driven credit risk assessment with an established physical branch network.

Deal structure and ownership

Part of the ₹1,000 crore investment will be used to acquire the controlling stake in Bizloan, while the remaining capital will fund platform architecture, loan origination systems, and geographic expansion. EY Investment Banking acted as the exclusive financial advisor for the deal.

As part of the transaction, early investors Michael & Susan Dell Foundation and Mohan Enterprises will exit Bizloan, while BLinC Invest will retain its holding.

Expanding credit for Indian small businesses

India's MSME sector underpins national economic strength, yet small enterprises face a credit gap estimated at more than ₹30 lakh crore. Vegafin intends to bridge this shortfall by offering secured loans ranging from ₹8 lakh to ₹30 lakh to kirana stores, pharmacies, hardware shops, and local trade units that often lack formal financial records.

Acquiring Bizloan provides Vegafin with immediate access to an operational base of 35 branches and ₹235 crore in assets under management (AUM). Bhaskar said acquiring an established lender saves 18 to 24 months compared with starting from scratch.

Vegafin plans to enter two or three additional states over the next six to 12 months, targeting a tripling of its AUM within 18 months through faster turnaround times and accurate AI risk pricing.