IIFL Fintech Fund books strong returns from partial exit in FinBox

Early-stage fintech-focused investor IIFL Fintech Fund has made a partial exit from its investment in FinBox, a credit infrastructure and embedded finance platform, that was part of PayPal’s India incubator programme in 2017.

IIFL Fintech Fund had first invested in FinBox in 2021 during its pre-Series A round, alongside existing investor Arali Ventures, a venture capital firm that primarily invests in B2B technology companies.

Beyond capital, the fund also supported FinBox in scaling its technology and expanding partnerships across banks, NBFCs, and fintechs, the VC firm said. 

IIFL Fintech Fund said it delivered a 5x multiple on invested capital (MOIC) on its initial tranche. 

The partial exit follows FinBox recently raising $40 million (around Rs 350 crore) in its Series B round, which was led by homegrown private equity firm WestBridge Capital. The round also saw participation from existing investors such as A91 Partners and Aditya Birla Ventures. 

“This marks the third exit of our fund in the last year and underscores our commitment to identifying and backing high-growth businesses with strong fundamentals,” said Mehekka Oberoi, fund manager, IIFL Fintech Fund. “Our investment thesis was anchored around the embedded finance space and the transformative role it will play in expanding access to credit. The partial exit not only validates our strategic approach but also reinforces the strength in our portfolio and the value we aim to create for our stakeholders,” Oberoi added. 

Founded in 2016 by Rajat Deshpande, Anant Deshpande, Nikhil Bhawsinka, and Srijan Nagar, FinBox’s products help non-banking financial companies lower credit risk, improve approval rates, and onboard customers digitally. 

IIFL Fintech Fund, set up in 2021 to invest in early-stage fintechs that can collaborate with the broader IIFL group, has made over 13 investments and multiple exits to date. 

Over the last four years, IIFL Fintech Fund has invested in various fintech segments. Its portfolio comprises Leegality, FinBox, DataSutram, Finarkein Analytics, Finvu, Trendlyne, Insurance Samadhan, Xtracap Finance, Castler, Vitra.Ai, EasyRewardz, Multipl, Riskcovry, and TrustCheckr, which was sold to TrueCaller.

Recently, the company made a full exit from Finarkein Analytics, a financial data analytics firm, claiming that it achieved over 100% returns in three years.