Fintech Startup Niro Shuts Down After $20M Funding

Founded in 2021 by Aditya Kumar and Sankalp Mathur, Niro operated as a B2B2C lending platform that helped consumer internet companies embed credit offerings for their users. The Bengaluru-based startup demonstrated remarkable early growth, building $100 million in assets under management within just two years of launch and handling over 170 million user flows at its peak. Through 30 partnerships with leading financial institutions and major internet platforms, Niro disbursed $200 million in personal loans ranging from Rs 50,000 to Rs 7 lakh for 6 to 72 months, with interest rates between 12% and 28%.

The company attracted significant investor interest, raising $20 million from backers including Elevar Equity, GMO Venture Partners, Rebright Partners, Mitsui Sumitomo Insurance VC, and Innoven Capital. In his LinkedIn announcement, Kumar expressed surprise at the shutdown, stating, ‘We had achieved the impossible — built incredible teams, raised quality capital, and secured partnerships with top internet platforms and lenders.’ Despite this strong foundation, the company was unable to navigate the challenging market conditions that emerged.

Kumar identified three primary factors that converged to force Niro’s closure: regulatory hurdles, credit risks, and funding constraints. The regulatory tightening in personal lending created significant headwinds for the company’s core business model, while deteriorating credit conditions across the market increased the risk profile of their lending operations. Simultaneously, restricted capital availability limited the company’s ability to weather these challenges or pursue alternative strategies.

These pressures forced Niro to pivot its business model multiple times in an attempt to adapt to the changing environment. Kumar noted that while financial institutions remain eager for high-quality consumer data to improve underwriting, regulatory pressure and reduced innovation appetite have slowed industry growth significantly. The combination of these factors created what Kumar described as a ‘perfect storm’ that ultimately proved insurmountable, despite extensive efforts to find investors globally and acquirers locally.

Reflecting on Niro’s journey, Kumar said he would ‘do it all over again,’ calling the venture ‘the right idea, at the right time, with the right backing.’ He expressed particular gratitude to investors and team members, including Jyotsna, Sandeep Farias, Shikha, and Elevar Equity, for their unwavering support throughout the company’s four-and-a-half-year journey. The shutdown represents a significant setback in India’s B2B2C lending space, particularly given Niro’s demonstrated ability to scale rapidly and establish partnerships with major players.

Despite the closure, Kumar remains optimistic about India’s fintech ecosystem. He plans to take time off to unwind and will attend the Global Fintech Fest as an attendee, suggesting continued engagement with the industry. Niro’s story serves as a cautionary tale about how even well-funded, rapidly scaling fintech startups with strong partnerships can fall victim to regulatory shifts and market conditions. The case highlights the particular vulnerabilities of lending-focused fintech models in emerging markets where regulatory frameworks are still evolving and credit conditions can change rapidly.