Shivalik Small Finance Bank announced that it has raised ₹100 crore, which is about $12 million, in a new equity funding round. The round was led by SMBC Asia Rising Fund, the corporate venture capital arm of Japan’s Sumitomo Mitsui Banking Corporation. This investment marks a strong vote of confidence from a global banking giant in India’s fast-growing small finance sector.
SMBC Asia Rising Fund invested ₹60 crore and bought a 4.99% equity stake in Shivalik. This deal values the bank at around ₹1,200 crore. Existing investors Accel, Quona Capital, Lightspeed, and Sorin Investments also took part in the round, contributing the remaining ₹40 crore. All four have supported the bank in earlier stages and continue to back its growth.
Why This Round Matters
This is Shivalik’s third major equity raise since it became a small finance bank in April 2021. Before that, it operated as an urban cooperative bank for many years. Moving from a cooperative to a small finance bank gave it more freedom to expand its reach, attract larger investors, and serve more customers with better technology.
By leading this round, SMBC Asia Rising Fund shows that global investors believe in Shivalik’s model. The fund focuses on investing in regulated financial institutions in Asia that have the potential to work with SMBC’s network and create new business opportunities. This partnership can help Shivalik open doors to international banking practices, expertise, and possibly even new cross-border services.
How Shivalik Plans to Use the Funds
Shivalik will spend the new capital in three main areas.
1. Strengthening its technology stack
The bank will upgrade its core banking systems, improve mobile and web platforms, and make digital services faster and more secure. Stronger technology will help the bank serve customers better and support larger transaction volumes.
2. Expanding hiring in product, engineering, and operations
Shivalik will bring in more skilled professionals to design new financial products, improve digital solutions, and streamline banking operations. These hires will help the bank deliver more value to customers and partners.
3. Scaling its Banking-as-a-Service (BaaS) platform
The bank wants to become a key provider of banking services to fintech companies, small businesses, and other partners. Through BaaS, partners can offer financial services under their own brand while using Shivalik’s infrastructure. This approach can reach underserved micro, small, and medium enterprises (MSMEs) and retail customers in semi-urban and rural areas, where traditional banking options remain limited.
CEO’s Vision for the Future
Managing Director and CEO Anshul Swami explained that Shivalik’s aim is to build a strong digital foundation for MSMEs and retail customers across “Bharat” — a term often used to describe India beyond the big metro cities.
He said the bank’s BaaS model allows easy integration for partners, creating new use-cases in financial services. Shivalik combines deep technology capabilities with a partner-first approach, which makes it possible to deliver scalable solutions to a wide variety of customers. Swami stressed that the fresh funding will help the bank accelerate these efforts and strengthen its position as a digital leader in the small finance sector.
Stronger Capital for Stronger Growth
The new funding lifts Shivalik’s capital adequacy ratio from 19% to 24%. This ratio measures a bank’s ability to handle financial risks. A higher number means greater strength and stability. With this boost, Shivalik can grow its loan book and overall business at a pace of 35% to 40% annually in the current financial year.
At present, the bank serves more than 900,000 customers through 79 branches across 11 states. Its business portfolio stands at over ₹6,700 crore, and it recorded annual revenue of ₹423 crore in the last financial year. These figures show steady growth and a solid customer base ready to benefit from more digital products and services.
Track Record of the Investors
SMBC Asia Rising Fund has invested in several companies across Asia, and this deal marks its sixth investment in India. The fund focuses on building partnerships with regulated financial institutions that can collaborate with SMBC’s global network. By investing in Shivalik, SMBC sees an opportunity to co-develop products and create new services for customers in India and potentially in other markets.
Accel, Quona Capital, Lightspeed, and Sorin Investments have been part of Shivalik’s journey for years. In June 2024, these investors also took part in a ₹100 crore equity round, showing consistent trust in the bank’s leadership and vision. Their continued participation signals long-term commitment to the bank’s growth.
Ownership Structure and Market Position
After the latest round, institutional investors now hold about 29.31% of the bank’s equity. Promoters own around 40%, and retail investors hold the rest. Many of these retail shareholders were originally part of the bank’s cooperative base before it transformed into a small finance bank.
Shivalik stands out as the only small finance bank in India that evolved from a cooperative. This unique history gives it deep roots in community banking and a strong understanding of customer needs in smaller cities and rural regions.
Digital-First Approach
Shivalik operates on modern banking technology platforms, including a core banking system and digital banking suite that allow it to deliver services quickly and securely. Its systems support mobile-first and cloud-native operations, which are critical for reaching customers who may not have easy access to physical branches.
The bank’s BaaS platform positions it well in India’s rapidly changing financial landscape. As fintech companies and digital marketplaces look for reliable banking partners, Shivalik can provide the necessary infrastructure while letting these partners maintain their customer relationships. This approach expands Shivalik’s reach far beyond its physical network.
The Bigger Picture
The investment from SMBC Asia Rising Fund highlights a broader trend: global investors are increasingly interested in India’s inclusive banking segment. The combination of strong economic growth, rising digital adoption, and large underserved markets makes India an attractive place for strategic capital.
For SMBC, partnering with a small finance bank like Shivalik offers insight into rural and semi-urban markets — areas that are very different from the urban-focused banking sectors in many other countries. For Shivalik, SMBC’s backing brings not just money, but also expertise, technology knowledge, and potential access to a global network.
Looking Ahead
With the new capital, Shivalik aims to strengthen its leadership in serving MSMEs and retail customers outside major metros. The bank will continue to expand its branch presence, improve digital channels, and launch innovative financial products.
Its focus on technology, partnerships, and customer experience sets it apart from traditional small finance banks. As more people in rural and semi-urban India come online, Shivalik’s digital-first model could help it capture significant market share.
By combining community banking values with advanced technology, Shivalik shows how small finance banks can play a major role in India’s financial inclusion story. The investment from SMBC Asia Rising Fund provides the fuel needed to speed up that journey.
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