Innoven Capital-backed fintech startup Niro shuts shop

Innoven Capital-backed Niro has shut down, its co-founder, Aditya Kumar, said on LinkedIn.

The company, which helped consumer internet platforms offer financial products such as loans to users, had raised $20 million in venture funding and had enabled $200 million in loan disbursements.

However, despite being a first mover, the company struggled with regulatory pushback on personal lending, credit deterioration, and sub-optimal capitalisation that pushed the firm to pivot business models. Despite this, the firm ran out of capital.

“Despite scouring the globe for capital and the country for suitors - I wasn’t able to bring this one home,” Kumar said.

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In the same post, Kumar also pointed out an existing gap in the ecosystem. “Financial institutions lack proprietary distribution and differentiate data for underwriting, which fundamentally makes their distribution low quality and expensive, and underwriting commoditised.”

Meanwhile, consumer internet platforms like e-commerce apps or travel apps can reach millions of users and offer these services seamlessly. However, consumer platforms “don’t speak (or understand) the language of financial institutions with ultra-low risk appetites, low product capabilities, and increased regulatory scrutiny do. FI’s inability to innovate & build products contextually compounds these issues,” Kumar said.

This mismatch limits the potential of embedded fintech solutions.

Despite the challenges persisting in the space, the co-founder voiced optimism regarding Niro’s peers building in this space. “I remain excited to see how our peers in this space solve for this in the coming years.”

According to Tracxn, Niro reported a revenue of Rs 39.6 crore in FY24 compared to Rs 10.5 crore in FY23. The firm also saw its net losses for the period widen to Rs 77.8 crore during this period, compared to Rs 23.9 crore in FY23.