Prayaan Capital raises Rs 110 Cr in Series A led by Peak XV Partners

Chennai-based MSME lending platform Prayaan Capital has raised Rs 110 crore in Series A round of funding led by Peak XV Partners.

Prayaan Capital will use this funding round to build the lending platform, strengthen the leadership team and expand operations across key MSME markets in India. This NFBC is led by Rangarajan Krishnan, former Joint Managing Director and CEO of Five-Star Business Finance.

Rangarajan Krishnan recently acquired a controlling stake in Prayaan Capital and is now steering the company toward a technology-first operating model. The platform aims to combine deep on-ground underwriting expertise with digital tools across sourcing, credit assessment and collections. The focus will be on serving underserved micro, small and medium enterprises (MSMEs) across India — a segment estimated to face a credit gap of nearly $300 billion.

On the funding raised, Rangarajan Krishnan, Promoter, Prayaan Capital, said "Small businesses are the backbone of India’s economy, yet millions remain underserved by formal credit. Prayaan Capital is built on the belief that combining deep customer understanding with technology can meaningfully expand access.”

According to Prayaan Capital, India is home to approximately 70 million MSMEs employing nearly 300 million people. Despite their critical role in driving economic growth and employment, access to formal credit remains limited for a large section of small entrepreneurs. Prayaan Capital aims to address this gap by building an institution that blends branch-led distribution with data-driven underwriting and operational discipline.

Peak XV Managing Director G V Ravishankar said, "We have known Ranga for over 15 years, and our partnership has been shaped by a shared commitment to expanding access to credit for small businesses. He and his team bring deep experience and a genuine obsession with serving this segment well.”