Startup Deep Dive : Ecofy — India’s only green-only lender tripled its income and still lost money

In FY25, Ecofy nearly tripled its income to ₹103.5 crore (about $10.8 million) and lent to more than 120,000 households and small businesses. In the same year it lost ₹34.6 crore, its third straight annual loss, and its bad-loan ratio climbed from near-zero to 1.34%. That is the paradox of India’s only green-only lender: it is growing fast on money from development banks, and it has not yet made a rupee of profit.

Ecofy Finance Private Limited is not a solar company or an EV maker. It is a non-banking financial company (NBFC) that will lend for exactly one thing: greener assets. Electric two- and three-wheelers, rooftop solar, energy-efficient equipment and small-business credit tied to sustainability. Its two founders left long careers running some of India’s biggest lenders to build a book that most banks still find too small, too new and too hard to underwrite. Whether that bet pays off comes down to unit economics that a green label does not change.

Quick facts

What Ecofy does

Ecofy is a retail NBFC that lends only for green assets. It puts credit in front of households and small businesses at the point where they choose a cleaner option and hesitate on price. The company describes itself as India’s only green-only NBFC, and its lending is split across three product families:

• Electric mobility: loans for electric two-wheelers and three-wheelers, financed through more than 100 OEM and dealer tie-ups (company-stated, as of March 2026).
• Rooftop solar: financing for residential and commercial and industrial (C&I) rooftop solar installations.
• SME and energy-efficiency credit: small-ticket business loans tied to energy-efficient equipment and sustainability upgrades, with tenures reported from six months to five years.

As of May 2026 the company reported more than 130,000 customers across 26 states and 500-plus cities, up from 120,000-plus at the March 2026 fundraise. Headcount was 283 as of August 2025 (MCA-linked filing).

The origin

Ecofy did not begin with a product. It began with two career lenders deciding that India’s climate transition had a financing gap no bank was rushing to fill. Rajashree Nambiar had spent close to three decades in finance, including running Fullerton India Credit Company (now SMFG India Credit) as MD and CEO and serving as CEO and executive director at IIFL Finance. Govind Sankaranarayanan spent 27 years at Tata Capital, where as group COO and CFO he helped scale the business to roughly ₹7,000 crore in revenue and ₹65,000 crore in assets under management.

The insight was narrow and specific. Mainstream banks lacked products designed for green assets, were uneasy underwriting an electric two-wheeler or a rooftop panel as collateral, and treated small-ticket loans as more trouble than they were worth. Meanwhile the demand was enormous: the RBI has estimated India needs about ₹85.6 trillion of climate-aligned investment by 2030, and much of that money was not reaching the household buying its first electric scooter. Ecofy’s answer was to do one thing only, and to do the underwriting that a general-purpose lender would not. The founders launched in 2022 and made the first loan in November of that year.

The struggle years

A single-mandate lender in a young category does not get an easy start, and Ecofy’s own numbers show it. The company has lost money every year of its existence, and the losses widened as it scaled.

In FY23, its first partial year, it reported a net loss of ₹18.8 crore on total income of just ₹2.2 crore. In FY24 the loss grew to ₹33.1 crore. In FY25 it reached ₹34.6 crore even as income tripled. Three years in, the cumulative loss is around ₹86 crore. Each year the company had to raise fresh capital to keep lending, which is why its capital adequacy ratio (CRAR) fell from 96.1% in FY23 to 80.3% in FY24 to 38.6% in FY25, all figures audited and reported by ICRA.

The book also started to show its first real stress as loans seasoned. Gross Stage 3 assets, the NBFC measure of loans overdue by 90 days or more, rose from 0.0% in FY23 to 0.03% in FY24 and then to 1.34% in FY25. The jump is small in absolute terms, but it is the moment an early lender learns what its underwriting is actually worth. The January 2024 rename, from Accretive Finance Private Limited to Ecofy Finance Private Limited, marked the point where the green brand and the legal entity finally became one thing.

The turning point

The clearest inflection came on 16 March 2026, when Ecofy closed a ₹380.5 crore equity round (about $42 million, company-stated), co-led by British International Investment (BII) and Finnfund, with existing backers Eversource Capital and FMO participating. It was the company’s largest single raise, and it changed the shape of the balance sheet at a moment when growth had thinned the capital cushion.

On one side of the event, at March 2025, Ecofy’s on-book AUM was ₹911 crore and its CRAR had fallen to 38.6%. On the other side, by the March 2026 announcement AUM had crossed ₹1,400 crore and, after the raise, capital adequacy was restored to roughly 50%. In the space of a year the company had grown the loan book by more than half and refilled the tank that fast growth had drained. A second signal arrived in August 2025, when Ecofy completed its first securitisation, GREEN VISION-1, a ₹20.38 crore pass-through certificate backed by a pool of electric two-wheeler receivables and rated provisional [ICRA]A+(SO). That transaction mattered less for its size than for what it proved: Ecofy’s green loans could be packaged and sold to capital markets, opening a funding channel beyond equity and DFI debt.

The money behind it

Ecofy’s capital story is unusual for a consumer lender: most of it comes from development finance institutions rather than venture funds. The company is promoted by the Green Growth Equity Fund (GGEF), managed by Eversource Capital, a partnership between the Everstone Group and founders of Lightsource bp. GGEF is a SEBI-registered Category II alternative investment fund set up in April 2018 with anchor commitments of $410 million from the National Investment and Infrastructure Fund (NIIF) and the UK’s Foreign, Commonwealth & Development Office (FCDO).

The disclosed funding sequence:

• January 2024 — ₹90 crore equity from FMO, the Dutch development bank (about $10.83 million, reported).
• March 2025 — ₹110 crore debt facility from Denmark’s IFU (Investment Fund for Developing Countries), reported at about $12.5 million.
• 16 March 2026 — ₹380.5 crore equity co-led by BII and Finnfund, with Eversource Capital and FMO returning; described by trade press as a Series B (about $42 million, company-stated).
• May 2026 — about $15 million from Mirova (an affiliate of Natixis Investment Managers) as onward-lending capital for rooftop solar and electric mobility; Mirova described it as its fourth India investment under its energy-transition strategy.

What each backer changed: FMO’s 2024 equity was the first external validation and seeded the initial book; IFU’s 2025 facility added debt so equity did not have to fund every loan; the BII- and Finnfund-led 2026 round restored capital adequacy to about 50% and funded the push past ₹1,400 crore in AUM; Mirova’s capital was earmarked specifically to grow the solar and EV books. A precise post-money valuation has not been publicly disclosed, so any figure would be an estimate.

How it makes money

Ecofy earns the way any lender does: it borrows or raises capital, lends it out at a higher rate, and keeps the spread after covering funding costs, operating costs and credit losses. The mechanics that matter here:

• Money in: interest and fees on green loans across EV, solar and SME segments. Total income rose from ₹2.2 crore (FY23) to ₹33.4 crore (FY24) to ₹103.5 crore (FY25), audited per ICRA.
• Cost of funds: a blend of DFI debt (such as IFU), onward-lending capital (Mirova) and, increasingly, securitisation. The GREEN VISION-1 PTC issued in August 2025 carried a 10.80% coupon, a marker of Ecofy’s own market borrowing cost.
• Where the margin sits: in the net interest spread minus credit losses. With Gross Stage 3 still low at 1.34% (FY25), the book’s economics depend heavily on keeping delinquencies contained as it seasons.
• The part people get wrong: Ecofy is not paid a subsidy for being green. The green mandate shapes which assets it underwrites and which impact-focused capital it can attract cheaply, but each loan still has to clear ordinary lending math to be profitable.

The company also earns an intangible it can sell to funders: measured climate impact. Ecofy has stated it helped avoid more than 25,000 tonnes of carbon by March 2025, the kind of metric that opens DFI and impact-fund balance sheets.

The numbers

Standalone audited figures as reported by ICRA (₹ crore). Total managed assets is the on- and off-book portfolio; profit after tax is negative in every year shown.

Two caveats worth naming. First, some trade press has reported a wider FY25 net loss of about ₹42 crore and operating revenue nearer ₹93 crore; the difference from ICRA’s figures is largely a total-income versus operating-revenue distinction, and this piece uses the audited ICRA numbers as primary. Second, on-book AUM was ₹911 crore at 31 March 2025 and crossed ₹1,400 crore (about $146 million) by March 2026, so the loan book roughly grew by more than half in a single year.

Where the money comes from

Ecofy’s portfolio is more concentrated than its “green” label suggests. As of 31 March 2025, its ₹911 crore AUM broke down as:

• EV financing: 52% — the largest single segment, led by electric two-wheelers.
• Rooftop solar: 40% — residential and C&I installations.
• SME financing: 8% — the smallest slice, and the newest.

The surprise is how much of the book rides on electric two-wheelers, a fast-moving, small-ticket, thin-file category. That is also where Ecofy proved its funding model: its first securitisation, GREEN VISION-1, was backed specifically by an EV-2W receivables pool of more than 3,000 contracts, all to borrowers with a CIBIL score of at least 700 and none overdue at the cut-off date. Distribution is broad rather than deep in any one place: more than 100 OEM and dealer partners and 23-plus banks and financial institutions channel and fund the loans (company-stated, March 2026), spread across 26 states and 500-plus cities.

The risks

• Credit risk as the book seasons. Gross Stage 3 rose from 0.03% (FY24) to 1.34% (FY25). More than half the book is small-ticket EV loans to thin-file borrowers, where losses can rise quickly if repayment discipline slips. The whole margin depends on keeping delinquencies low, and the pool is still young enough that its true loss rate is not yet proven.
• No path to profit yet. Ecofy has lost money for three straight years, with the FY25 loss (₹34.6 crore) still widening even as income tripled. Cumulative losses of about ₹86 crore mean the company must keep raising capital until spreads, scale and credit costs finally cross into profit. If that crossover slips, so does the equity story.
• Funding and capital intensity. Lending is capital-hungry, and fast growth drained CRAR from 96.1% to 38.6% in two years before the 2026 round refilled it to about 50%. Ecofy leans heavily on DFI equity and offshore debt; a tighter global impact-capital market, or rising funding costs (its own securitisation priced at 10.80%), would squeeze the spread directly.
• Asset and policy dependence. EV resale and battery values are unsettled, OEM churn is high in electric two-wheelers, and rooftop-solar demand is sensitive to subsidy and net-metering policy. A shift in any of these changes both loan demand and collateral value at once.

The takeaway

Ecofy is a clean test of a simple idea: that patient, impact-focused capital can fund a lending category before it is profitable, and buy time for the economics to mature. The founders used their reputations to pull DFI money into a book banks would not touch, and in three years they built a ₹1,400 crore portfolio serving more than 130,000 customers. That is real, and it is fast. But the losses are also real, and they widened while the company grew. The transferable lesson is not about being green. It is that a mission can open the door to cheaper capital and a defensible niche, yet it cannot rewrite the arithmetic of lending. Spread, scale and credit losses still decide who survives. Ecofy has bought itself the time to get those three right; the next few years will show whether it does.

Frequently asked questions

What is Ecofy?

Ecofy Finance Private Limited is an Indian non-banking financial company (NBFC) that lends only for green assets: electric two- and three-wheelers, rooftop solar, energy-efficient equipment and sustainability-linked SME credit. It calls itself India’s only green-only NBFC. It was incorporated in March 2022 and made its first loan in November 2022.

Who founded Ecofy?

Ecofy was co-founded in 2022 by Rajashree Nambiar, its MD and CEO, formerly MD and CEO of Fullerton India Credit and a senior leader at IIFL Finance, and Govind Sankaranarayanan, its COO, a 27-year Tata Capital veteran who was group COO and CFO there.

Is Ecofy profitable?

No. As per audited figures reported by ICRA, Ecofy has lost money every year since inception: net losses of ₹18.8 crore (FY23), ₹33.1 crore (FY24) and ₹34.6 crore (FY25), even as total income rose to ₹103.5 crore in FY25.

How much funding has Ecofy raised and from whom?

Disclosed rounds include ₹90 crore in equity from FMO (January 2024), a ₹110 crore debt facility from IFU (March 2025), a ₹380.5 crore equity round co-led by British International Investment and Finnfund (March 2026), and about $15 million from Mirova (May 2026). It is promoted by the Green Growth Equity Fund, managed by Eversource Capital.

What does Ecofy actually lend for?

As of 31 March 2025 its ₹911 crore AUM was 52% EV financing, 40% rooftop solar and 8% SME lending. By March 2026 its AUM had crossed ₹1,400 crore across more than 130,000 customers in 26 states.

Sources

Figures are as of September 2026. Currency converted at $1 ≈ ₹96.0 as of 18 September 2026 (Trading Economics).

• ICRA, rating rationale for Ecofy Finance Private Limited (GREEN VISION-1 PTC), August 2025 — audited financials, AUM, segment split, entity history.
• Ministry of Corporate Affairs / Tofler / The Company Check — CIN, incorporation date and registered office, 2026.
• Entrackr, “Ecofy raises Rs 380.5 Cr in Series B round led by BII and Finnfund,” March 2026.
• Autocar Professional, “Ecofy raises INR 380 crore in fresh equity,” March 2026.
• YourStory, “Ecofy raises $15M from Mirova,” May 2026; EVreporter, May 2026.
• TechNode Global, “Ecofy raises $10.83M funding from FMO,” January 2024.
• The Better India, profile of Rajashree Nambiar and Ecofy, 2026 — founder background, customer and impact figures.
• Eversource Capital, company news releases on Ecofy, 2022–2024.
• Trading Economics, USD/INR reference rate, September 2026.

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