Niro’s Shutdown: A Fintech Company’s Journey

Fintech startup Niro has officially ceased operations after four and a half years, as announced by founder Aditya Kumar in a social media update. The shutdown follows the company’s achievement of raising approximately $20 million throughout its journey from investors such as Elevar Equity, GMO Venture Partners, Rebright Partners, Mitsui Sumitomo Insurance VC, and Innoven Capital.

Background of Niro

Founded in 2021 by Kumar alongside Sankalp Mathur, Niro operated as a B2B2C platform aimed at assisting consumer internet companies in becoming enablers of consumer finance through loan offerings. The startup used to provide loans ranging between Rs 50,000 and Rs 7 lakh, with terms lasting from 6 to 72 months and interest rates varying from 12% to 28%.

Achievements and Operational Challenges

The company reported building $100 million in assets under management (AUM) within slightly over 24 months, and at its peak, it reached 170 million users. Despite these successes, Niro faced significant challenges, including regulatory pressures, credit deterioration, and a scarcity of capital, ultimately leading to the closure of its operations. Niro’s model, which connected consumer platforms with financial institutions, encountered obstacles due to increasingly stringent lending and risk regulations that resulted in an unstable environment.

Financial Performance

In his farewell note, Kumar recognised the difficulties faced but stated he would embrace the journey again if given the chance. According to various sources, Niro generated Rs 7.86 crore in revenue during FY24, reflecting a dramatic drop of 59% compared to Rs 19.09 crore in FY23. Additionally, the company’s net loss expanded to Rs 48.7 crore in FY24, in contrast to Rs 36.9 crore in FY23. The financial results for FY25 are still pending.

Industry Trends

Over the past few years, a number of Indian startups across different sectors, including gaming, farm-to-fork, social media, and electric vehicles, have shut down in the face of various challenges. However, the lending sector has experienced relatively fewer closures.