Why we Invested in Optimo Loan

3 min readApr 29, 2024


Image credit: Omnivore

India’s goal to reach a USD 10 trillion-dollar economy by 2032 hinges on the growth of the MSME sector. However, MSMEs face a massive credit gap of USD 500 billion despite favourable policies from the government, including Priority Sector Lending (PSL) initiatives from banks. To put this credit gap into context, India has ~ 64 million MSME enterprises, of which only 14% have access to formal credit. In sharp contrast, more than 40% of MSMEs in developing countries have access to formal credit.

This reality presents a significant headroom for growth in MSME lending over the next decade. While there are numerous banks, NBFCs (wholesale + retail), and MFIs serving this space, we believe there is a significant white space for Optimo to build a lending business focused on three tenets:

(a) Serving underserved MSMEs in rural regions (across ‘Bharat’ — sub-tier 3 cities/towns)

(b) Building processes with instant approvals and limited documentation requirements

(c) Offering bite-sized loans with flexible payment and interest terms

With these three principles at its core, Optimo is capitalizing on India’s best-in-class fintech infrastructure to transform the rural economy by enabling easy and timely access to credit for rural MSMEs.

Optimo is the brainchild of Prashant Pitti, one of India’s most renowned entrepreneurs, notable for co-founding EaseMyTrip. EaseMyTrip stands out as India’s only bootstrapped tech startup to go public in the last decade. Before EaseMyTrip, he worked with prominent financial institutions in the United States, such as Capital One and HSBC.

Over the last two years, we have been building a thesis in MSME lending and have met 10+ players in the same space or adjacent spaces in lending. Three aspects stood out for us in Optimo:

  1. Access to capital at relatively lower costs: The biggest challenge for NBFCs over the last decade has been the need to constantly raise equity capital to subsequently raise debt capital within the limits of maintaining healthy debt-to-equity leverage ratios. While co-lending regulations are evolving to solve this challenge, co-lending partnerships have been tough to crack. In addition, the cost of debt capital is significant, which impacts the ability to offer attractive rates to MSMEs. In the recent past, there has only been one company, Navi, that has broken these paradigms. We believe Optimo could have a similar journey because of Pitti’s proven business acumen and his extensive connections with banks / financial institutions to access debt and co-lending partnerships.
  2. Innovative underwriting processes: The existing underwriting processes for MSME lending (in every bank / NBFC) have seen little innovation. As a result, long turnaround times, complex documentation, unfair rejections, and poor customer experience remain the standard experience. As an industry outsider, Prashant has the benefit of taking a first principles approach and is innovating the underwriting process using a mix of third-party data sources, personal discussions, and in-depth business information on the underlying MSME. As a result, Optimo has built a unique yet robust rule engine with low operational complexity for underwriting MSMEs in rural regions.
  3. Micro markets approach + phygital model: Optimo has chosen a cluster-led approach to set up micro-branches in rural areas for its blended (physical + digital) distribution model. The startup has identified districts and sub-districts to set up micro-branches and will build dense operations in those regions to build customer awareness, unlock network effects, improve collections, and drive better economics.

In the next 24 months, the company plans to deepen its presence across Karnataka, Andhra Pradesh, and Tamil Nadu. The company will use the capital raised to finance its in-house NBFC, forge co-lending partnerships, build a top-notch team from the financial services industry, and improve technology capabilities in distribution, underwriting, and collection.

We are excited to welcome Optimo to our portfolio and support Prashant’s vision to enable access to credit for the rural MSMEs in India.




Omnivore is a venture capital firm, based in India, which funds entrepreneurs building the future of agriculture and food systems.