Founder Pitti leads $17.5 mn round at Optimo; Blume, Omnivore participate

Company Overview - Optimo Capital, a loan-against-property lender, has raised $17.5 million in a funding round led by founder Prashant Pitti, with participation from Blume Ventures and Omnivore [1] - The company has also secured nearly $12.5 million in debt from IDFC Bank and Axis Bank, bringing total equity fundraising to $27.5 million [1] Target Market - The company focuses on medium and small business entrepreneurs in tier-2 and tier-3 cities in India, providing loans against commercial or residential property as collateral, typically at lower rates than unsecured loans [2] Expansion Plans - The new funds will be utilized to expand the company's presence, aiming to establish operations in six more cities by the end of the fiscal year, targeting a total of 80 branches [3] - Currently, Optimo Capital operates in 56 cities across Karnataka, Tamil Nadu, Telangana, Andhra Pradesh, and Madhya Pradesh, with plans to expand into northern and western India [3] Financial Goals - Optimo Capital's assets under management currently stand at ₹350 crore, with a target of reaching ₹700 crore by the end of FY26 [4] Competitive Landscape - Traditional banks like HDFC Bank, State Bank of India, ICICI Bank, and Axis Bank have historically provided loans against property, while startups like InCred, Kishht, Money View, and Electronica Finance Ltd. are also entering this space [4] Technology Integration - A portion of the new capital will enhance the company's technology infrastructure, particularly its AI capabilities, utilizing 7.7 million digital land records to expedite loan disbursement [5] - The company employs an AI agent to assist potential borrowers in quickly assessing the construction value of their homes, facilitating faster loan processing [5] Market Growth - The loan against property segment is projected to grow at a 15.34% CAGR, making it the fastest-growing segment in India's home mortgage market according to market researcher Mordor Intelligence [6] Challenges - Experts highlight low awareness of loan products among commercial borrowers as a barrier to scaling for NBFCs, particularly in tier-2 and tier-3 cities [7] - Challenges include high monitoring and collection costs due to borrowers being spread across smaller towns and reliance on cash-based business practices, as well as risks of fraud related to documentation and financial reporting [7] Founder Background - Prashant Pitti, the founder of Optimo Capital, previously co-founded the online travel company EaseMyTrip, which went public in 2021. He announced Optimo Capital in 2023 after raising $10 million in seed funding from Blume and Omnivore [7]