In a fresh show of investor confidence, education-focused non-banking finance company (NBFC) Varthana has secured INR 75 Cr (~USD 8.7 million) in debt funding in a round co-led by B2B ecommerce giant OfBusiness and its financial services arm Oxyzo, alongside contributions from Ambium Finserve and IKF Finance.
This capital infusion, formalized through the issuance of 75,000 non-convertible debentures (NCDs) with a face value of INR 10,000 each, is poised to accelerate Varthana’s core mission: financing low-budget private schools and students from underserved communities across India seeking higher education.
The Bengaluru-based NBFC has carved a niche for itself by offering collateral-free, affordable loans tailored to the unique needs of schools and students in Tier II to Tier IV cities. The latest funding round is a significant milestone in its growth trajectory as it intensifies efforts to scale its loan book and deepen financial access in the Indian education ecosystem.
Targeted Growth in Core Segments
According to Varthana’s internal estimates and spokesperson remarks, the company’s loan book swelled by 48% YoY—from INR 1,280 Cr in FY24 to INR 1,896 Cr in FY25. The firm now eyes a 50% increase by March 2026, aiming to cross the INR 2,800 Cr mark.
“Strengthening our offerings in the school and student loan segments remains a strategic priority. The current funding will help us serve more institutions and students who are traditionally underserved by mainstream finance,” said the company’s spokesperson.
Strategic Backing from Long-Term Partners
This is not Varthana’s first major capital infusion. The company raised INR 120 Cr (~USD 15 million) from BlueOrchard Microfinance Fund in December 2024 under the external commercial borrowings (ECB) route—its second round from the impact investor following a INR 85.38 crore (~USD 10 million) raise in April the same year.
“BlueOrchard and Varthana share a common belief in the power of inclusive education. This partnership underscores our long-term commitment to bridging the financial gap in education,” said Yan Kit Lee, Head of Originations, Asia, BlueOrchard Investments (Singapore).
In March 2024, the company also acquired the school loan portfolio of Indian School Finance Company (ISFC) for INR 126 Cr, consolidating its presence in the education financing space. Earlier, Varthana had also secured INR 119.54 crore (~USD 14 million) from Blue Earth Capital, in addition to backing from seasoned investors like ChrysCapital, Accion, and Omidyar Network India.
Impressive Financials & Footprint
Founded in 2013 by Brajesh Mishra and Steve Hardgrave, Varthana now operates across 40 cities in 15 states, having disbursed over 75,000 loans and financed more than 11,500 affordable private schools.
Its offerings include:
- School loans for infrastructure upgrades, smart classrooms, campus development, and equipment.
- Student loans of up to INR 5 Lakh for undergraduate, postgraduate, certification, and skill development programs.
The company’s financial performance has been notably resilient. It reported:
- Operating revenue of INR 209 Cr in FY24
- Net profit of INR 30 Cr, a six-fold jump from previous years
- Disbursement of INR 230 Cr in Q1 FY25—nearly double YoY
Varthana is targeting loan disbursements of INR 1,600 Cr in FY25, with an asset base goal of INR 2,200 Cr by March 2025.
Riding the Fintech Lending Wave
Varthana’s momentum comes amid India’s lending tech boom, driven by deeper internet penetration, rising middle-class aspirations, and the government’s push toward financial inclusion. Valued at INR 34.32 lakh crore (~USD 402 billion) in 2024, the Indian digital lending market is expected to surpass USD 1.3 trillion by 2030, making it one of the world’s largest.
In this environment, NBFCs like Varthana—focusing on impact-led, sector-specific lending—are attracting sustained investor interest. Similar activity has been seen across the space, with Minitifi raising INR 1,536 crore (USD 180 million) and Flexiloans raising INR 290 Cr in recent rounds.
Final Thoughts
With this latest INR 75 Cr fundraise, Varthana is not just bolstering its balance sheet—it is reaffirming its commitment to bridging educational gaps through finance. In a sector where access to capital often defines the quality of learning environments, Varthana’s expanding footprint and capital strategy are setting the benchmark for inclusive educational finance in India.
As the digital lending space evolves, Varthana’s sustained growth, diverse funding sources, and sharp focus on the education sector position it as a rising force in India’s NBFC landscape—one loan, one school, and one student at a time.
For more details related to IPO GMP, SEBI IPO Approval, and Live Subscription stay tuned to IPO Central.