Synopsis
Fintech startup Niro has shut down after four and a half years. The company cited changes in the sector and difficulties in securing new funding as reasons for its closure. Niro had previously raised significant capital and facilitated loan disbursements for e-commerce platforms. Despite its efforts, the startup could not overcome regulatory challenges and capital constraints.
Fintech startup Niro has stopped operations in the face of sectoral changes and its inability to raise capital, cofounder and CEO Aditya Kumar wrote in a social media post on Tuesday.
“$20 million in funding, $200 million in loan disbursements, 30 partnerships and 4.5 years later — we’ve had to shut down Niro,” Kumar posted.
Founded in 2021 by Kumar and Sankalp Mathur, Niro enabled ecommerce platforms to extend credit to their consumers. It had partnered with online shopping site Snapdeal, classifieds platform Quikr, and realty proptech site Housing.com.
The startup had raised $11 million in a funding round through a mix of equity and debt in April 2023. While the equity capital came from Elevar Equity, GMO Venture Partners, Rebright Partners and Mitsui Sumitomo Insurance VC, among others, the debt capital was funded by Innoven Capital. It had raised $3.5 million in October 2021 from investors led by Elevar Equity in the seed funding round.
Niro was able to scale to $100 million in assets under management (AUM) within 24 months from launch and served over 170 million users at peak, Kumar said.
“But sure enough, a perfect storm of regulatory pushback on personal lending, credit deterioration and sub-optimal capitalisation forced us to pivot business models (successfully), just as capital ran out,” Kumar wrote. “Despite scouring the globe for capital and the country for suitors — I wasn’t able to bring this one home.”
Despite the headwinds, Kumar showed confidence in Niro’s business model.
“Financial institutions (FIs) lack proprietary distribution and differentiate data for underwriting, which fundamentally makes their distribution low quality and expensive, and underwriting commoditised,” Kumar said in the post.
“On the other hand, consumer internet platforms have solved for this, but don’t speak (or understand) the language that financial institutions with ultra-low risk appetites, low product capabilities and increased regulatory scrutiny do. FIs’ inability to innovate and build products contextually compounds these issues,” he added.
Kumar indicated that he will return with another fintech offering in the future.
Source: www.economictimes.indiatimes.com