Prayaan Capital Raises ₹110 Crore Series A Led by Peak XV Partners to Bridge India’s $300B MSME Credit Gap

Prayaan Capital, led by Rangarajan Krishnan (Ranga), former JMD and CEO of publicly listed Five-Star Business Finance, today announced that it has raised INR 110 crore in its Series A round led by Peak XV Partners.

Rangarajan Krishnan

Rangarajan Krishnan had recently acquired a controlling stake in Prayaan Capital. He aims to transform Prayaan into a new-age MSME lending platform, expanding access to credit for India’s small businesses by combining deep on-ground underwriting expertise with a technology-first approach across sourcing, underwriting, and collections. The company will focus on serving underserved MSMEs across India, a segment that continues to face an estimated USD 300 billion credit gap.

India’s approximately 70 million MSMEs employ nearly 300 million people and play a critical role in driving economic growth. Yet access to formal credit remains limited for many, creating a large and enduring opportunity for new-age lenders built with both operational discipline and modern technology at their core.

Ranga brings more than two decades of experience across financial services. As JMD and CEO of Five-Star Business Finance, he helped scale the company into one of India’s leading MSME lenders, culminating in a successful public listing in 2022. Peak XV has known and partnered with Ranga for over 15 years, including during his leadership journey at Five-Star, and is now partnering with him from day one as he builds Prayaan Capital.

Prayaan Capital seeks to build an institution that combines the proven strengths of branch-led distribution with a technology-enabled operating model. The company aims to leverage digital tools alongside deep customer understanding to improve credit access and serve small businesses more effectively.

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. I am grateful to partner with Peak XV, who have been long-term believers in this segment and have supported me through multiple chapters of my journey."

GV Ravishankar, Managing Director, Peak XV, 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. Having seen firsthand the impact they created at Five-Star, we are excited to partner with them from day one as they build Prayaan Capital."

The investment will be used to build Prayaan Capital’s lending platform, expand its team, and grow its presence across key MSME markets in India.

About Prayaan Capital

Prayaan Capital is a technology -enabled MSME lending platform focused on expanding access to credit for India’s small businesses. Led by Rangarajan Krishnan, former CEO of Five-Star Business Finance, the company combines deep underwriting expertise with modern technology to serve underserved entrepreneurs across India.

About Peak XV Partners

Peak XV Partners (formerly Sequoia Capital India & SEA) is a leading venture capital firm investing across India, APAC and beyond. Over the last 20 years of operations in the region, Peak XV has grown to manage over USD 10 billion in capital across 16 funds and has invested in over 450 companies. The portfolio has seen over 35 IPOs and several successful M&As to date. To know more, please visit www.peakxv.com.