Funding · Financial Services

Prayaan Capital raises ₹110 Cr Series A led by Peak XV

By Startup Enthusiast · 26 February 2026

What they do

Prayaan Capital is a Chennai-based NBFC providing business loans to MSMEs

It raised ₹110 crore in Series A funding led by Peak XV Partners

The funds will be used to build its lending platform and expand its team

Prayaan Capital raised ₹110 crore in Series A funding.
The round was led by Peak XV Partners.
The company will use the funds to build its lending platform and invest in technology.
It also plans to expand its team and grow its presence in MSME markets.
It follows a hybrid model combining branch-based distribution with a tech platform.

India's MSME sector faces an estimated $300 billion credit gap.
Only 19% of MSME credit demand was met formally by FY21, leaving about ₹80 lakh crore unmet.
India has about 70 million MSMEs employing around 300 million people.
MSMEs are the backbone of India's economy but struggle to access formal credit.

It offers loans to MSMEs in manufacturing, trading, and services sectors.
It also provides long-term secured loans by mortgage of commercial and residential property.
The company uses a hybrid model: branch-based distribution combined with a technology platform for underwriting, sourcing, and collections.
It was founded in 2018 by Madhan Mohan and Akash Chelvam.

Prayaan Capital will use the funds to build its lending platform and invest in technology.
It will expand its team and grow its presence in MSME markets.

Peak XV Partners (lead) — Peak XV Partners manages over $10 billion across 16 funds and has invested in over 450 companies. It closed $1.3 billion for three funds in 2026, its first independent funds after separating from Sequoia Capital in 2023.

Product: Business loans tailored for small and medium enterprises from manufacturing, trading and services sectors; long-term secured loans with digital underwriting
Customers: Underserved micro and small enterprises across India lacking access to traditional banking credit
How it makes money: NBFC providing technology-enabled lending through branch network combined with digital sourcing and underwriting
What sets it apart: Combines proven branch-led distribution with technology-first approach for credit access; targets $300 billion MSME credit gap