Mumbai-based green non-banking financial company (NBFC) Ecofy has closed a funding round of INR 380.5 crore (approximately USD 42 million) in growth equity, bringing in two new international investors while retaining backing from its existing institutional shareholders. The company said the raise strengthens its balance sheet as it moves into a phase focused on scaling retail green lending across India.
British International Investment (BII), the UK's development finance institution, and Finnfund Digital Access Impact Fund I LP, managed by Finnish development finance institution Finnfund, participated as new investors in the round. Eversource Capital, the sustainable infrastructure fund that established Ecofy, and FMO, the Dutch entrepreneurial development bank, continued their investment in the company. The combination of new and returning investors reflects sustained institutional interest in Ecofy's retail-led model at a time when development finance institutions are directing capital toward climate-linked lending in emerging markets.
Ecofy said the capital will support expansion of its lending operations across three product categories: rooftop solar, electric vehicles, and small and medium enterprise (SME) financing. The company reported an assets under management (AUM) figure exceeding INR 1,400 crore and a customer base of more than 1,20,000 borrowers. Its loan book is entirely retail-focused, comprising individual and small business borrowers rather than institutional clients. Following the fundraise, the company's capital adequacy ratio stands at approximately 50%, a figure it described as providing a foundation for the next stage of growth.
Ecofy operates through a digital lending platform and has built distribution partnerships with more than 100 original equipment manufacturers (OEMs) and over 23 banks and financial institutions. The company offers end-to-end digital loan processing, a model it says enables faster credit delivery to borrowers purchasing electric two- and three-wheelers, installing rooftop solar systems, or seeking SME financing for green assets.
Rajashree Nambiar, Co-founder, Managing Director and CEO of Ecofy, said the company was built on the premise that India's green transition would be driven by decisions made by small businesses, individual customers, and households. She said the capital would allow Ecofy to deepen its product offerings, expand distribution, and continue building what she described as a high-quality green lending franchise, while delivering risk-adjusted returns to investors.
Dhanpal Jhaveri, CEO of Eversource Capital, said Ecofy represented the firm's strategy of building category-defining sustainable platforms in India. He said the fundraise positions Ecofy to scale profitably while setting benchmarks for retail green finance in the country.
Shilpa Kumar, Managing Director and Head of India at BII, cited the company's focus on enabling households and small businesses across India to access affordable climate solutions, including e-mobility, rooftop solar, and green loans. She said the investment reinforces BII's commitment to backing platforms that drive sustainable growth and carbon reduction, and noted BII's partnership with Eversource, Finnfund, and FMO in supporting Ecofy's national expansion.
FMO's Senior Investment Officer Aditya Mohan said Ecofy had demonstrated strong fundamentals in building a specialised green finance platform with disciplined growth and sound governance, and that FMO was pleased to continue its support as the company deepens its contribution to India's clean energy and climate finance ecosystem.
Finnfund's investment managers Niklas Simola and Tuomas Vaulanen both commented on the rationale for the fund's participation. Simola said the investment aligns with the Digital Access Impact Fund I's goals of delivering commercial returns alongside climate impact and promoting gender inclusion through equitable digital financial services. Vaulanen said India's green finance sector was entering an early-growth phase where risk management would distinguish long-term participants, and that Ecofy had demonstrated an ability to scale while navigating evolving NBFC regulations and aligning with national priorities in renewable energy and electric mobility.
Ecofy was founded three years ago with a focus on financing green assets at the retail level. It was co-founded by Nambiar and Govind Sankaranarayanan, both described as veterans of the NBFC sector with decades of experience in building and scaling financial services businesses. The company's focus on retail borrowers — households and small businesses rather than large corporates — differentiates it within the broader green finance market in India.
The funding comes as India's retail green finance sector draws increased attention from development finance institutions seeking to deploy climate capital in markets where adoption of clean energy among households and small businesses remains constrained by access to affordable lending. BII has committed to directing at least 30 per cent of its new commitments by value to climate finance between 2022 and 2026, and manages investments in over 1,600 businesses across 66 countries. FMO manages a total committed portfolio of approximately EUR 13.5 billion across more than 85 countries, with a focus on agribusiness, energy, and financial institutions. Finnfund's Digital Access Impact Fund I targets digital infrastructure and financial inclusion investments in emerging and frontier markets and is classified as a Dark Green Fund under Article 9 of the European Sustainable Finance Disclosure Regulation (SFDR).
India's broader push toward renewable energy and electric mobility has created demand for retail financing products that incumbent banks have been slow to develop at scale. NBFCs with a dedicated focus on green asset categories have sought to fill this gap, though the sector remains at an early stage. Ecofy's fundraise is among the larger equity raises in the segment and signals continued appetite from international development finance institutions to back platforms operating in this space.
Ecofy said it intends to use its strengthened balance sheet to grow its retail green lending book through partnerships with banks and financial institutions, as it enters what it described as its next phase of operations.