AxiTrust has already raised funding in the seed round. The Gurugram-based firm has raised ₹23.5 crore, which is a clear indication of investors’ strong confidence in the model. It is a strategic round of funding, which was led by a major venture capital firm, General Catalyst. The success of this raise will provide momentum to the ambitious plan of the company to restructure an important but backward part of the financial structure in India.

Seed funding round and expansion

The investment, formally termed as a seed round, was led by General Catalyst, which assumed the first position in the funding. The involvement of General Catalyst is indicative of a larger pattern of large international investors gambling on more technologically specialised financial solutions being developed in India. The round involved a wide range of investors. This was a list of participants such as Atrium Angels, YAN Network, and Supermorpheous, among other major angel investors.

The group support available to AxiTrust offers the company not only capital but a wide range of strategic knowledge and mentorship. The new funding will be utilised in important development projects. The capital will be directed towards the development of the sound digital infrastructure required to facilitate the massive integration of surety bonds in India. This new infrastructure will disrupt the entire banking, insurance and government procurement system in the country, as a disruptive strata in many interconnected sectors.

The idea behind the formation of AxiTrust was to address a widespread and long-term issue afflicting the Micro, Small, and Medium Enterprises (MSMEs) in India. In the process of acquiring contracts, orders, or guarantees, MSMEs are usually asked to acquire traditional bank guarantees. The main disadvantage of the traditional system is that it entails the MSMEs revealing large security interests in the form of their most liquid assets or fixed property.

The impact of this inflexibility of the financial system is an incredible paralysis of working capital, which is a key resource for growth and expansion. The market data and this company indicate that out of the MSME working capital, an incredible amount of over ₹15 lakh crore is still not in operation; it is held in custody as security against such bank guarantees.

This need to secure collateral is a two-fold hit to the business in a market where access to credit is usually low. In a way of guaranteeing employment of their precious capital to acquire a guarantee, businesses are denied the opportunity to utilise their capital in making productive growth opportunities, such as running their operations, advancing technology, or increasing their size. AxiTrust, a Gurugram-based startup, realised that this collateral-intensive system was a major root cause of the lack of inclusion in economic growth and the inability of the MSMEs to enhance their involvement in both the government and in the private chain of supply.

Core offering and financial ecosystem

In 2024, a seasoned leadership team was co-founded by AxiTrust, with Aditya Tulsian (CEO), Rajeev Chari (COO) and Mukund Daga (CRO). This team is also associated with significant experience in the construction of the Indian fintech ecosystem. Aditya Tulsian, the CEO, was the co-founder of Numberz, an automation tool that automates accounts receivable and collections and was acquired successfully in 2022 by the software company Chargebee, which highlights his track record in entrepreneurship.

The core product of AxiTrust is a technological platform that is to be the basic digital infrastructure of surety bonds in India. Surety bonds are a paradigm shift in the sphere of financial guarantees, being the digital, insurance-based solutions that directly substitute the bank guarantees that demand collateral.

This shift to an insurance-based approach is essential because it is used to free up liquidity in the MSME segment and enhance the aspect of business confidence in transactions. Recent policy decisions have facilitated the adoption of surety bonds in India, namely the guidelines of the Insurance Regulatory and Development Authority of India (IRDAI) of 2022 and the further amendments to the General Financial Rules.

The enterprise incorporates profound knowledge in the fields of fintech, insurance, and risk management to establish a scalable layer of trust. It is the critical infrastructure provider behind this new so-called surety economy that enables the smooth issuance, underwriting, and management of these new digital bonds.

AxiTrust does this by actively engaging a wide range of financial ecosystem participants, including market leaders in the insurance sector, including The New India Assurance, Oriental Insurance and Iffco-Tokio General Insurance, in addition to financing institutions and policyholders. The aim is to safely and efficiently implement scale-based surety-backed solutions that can become highly accessible to the entire MSME segment.

Conclusion

AxiTrust raised ₹23.5 crore in a seed funding round led by General Catalyst. The fintech startup is directly competing with the collateral rigidity of the traditional bank guarantees by developing the digital rails required to provide surety bonds. This trend is expected to provide significant liquidity to MSMEs, altering the way business confidence is attained and handled in the nation. The high capital and strategic investment will help the company aggressively pursue its vision to enhance inclusive economic growth by promoting the widespread appeal of insurance-based financial options, which will be a major milestone towards a more efficient and capital-friendly financial future of Indian businesses.