After raising $5 million from Zurich-based responAibility Investments AG earlier this year, Gurugram-based financial technology company, Aye Finance has secured another $10 million from the investor.
The company said it will be utilizing these additional funds to offer business loans to the excluded microenterprise sector to support their growth and enable their inclusion into the formal economy.
The fintech lender raised $5 million from responAibility through non-convertible debentures (NCDs) and the balance $5 million has been issued from a securitisation pool raised by responsAbility, which was arranged by JP Morgan.
Commenting on the latest fundraise, Sanjay Sharma, MD and Founder of Aye Finance, said,
“We have found support from Indian and global leaders in our mission of providing inclusive finance to the micro enterprise sector of India, right since our inception in 2014. And even now, when the NBFC sector is going through a liquidity crisis, Aye has remained unaffected. This latest fundraise from responsAbility, which comes within three months after we raised Rs 234 Cr in Series D equity round, is a validation of the trust the investor community has in our model and in our ability to achieve our mission.”
Key investors in this transaction include the Overseas Private Investment Corporation (OPIC), a US government agency, providing the initial capital necessary to mobilize the private institutional investment in the deal, and Alecta, the fifth largest occupational pension provider in Europe, and investing in the essential risk capital.
In India there are over 60 million microenterprises and a majority of these businesses struggle to access formal lending channels. Founded in 2014 by Sanjay Sharma and Vikram Jetley, Aye has been providing business loans to this excluded segment. The lender has deployed this methodology and offered 1,40,000 loans to the sector.
Commenting on the transaction, Jaskirat S Chadha, Head of Financial Institutions Asia Pacific at responsAbility, said,
“responsAbility-managed funds have been providing funding for financial institutions targeting micro, small and medium-sized enterprises for the past 15 years. Through this transaction we bring global markets a step closer to the impact created by our partner institutions. We are pleased to have partnered with Aye Finance that has successfully built a scalable credit delivery channel aimed at financially excluded borrowers by combining its strong market understanding with technology.”
With a team size of 2500 employees and a branch network of 165 branches in 18 states, Aye claims to be the only Indian finance company to be funded by CapitalG (erstwhile Google Capital), the growth equity investment fund of Alphabet.inc., along with 5 marque investors - SAIF Partners, Falcon Edge Capital, Accion, LGT and MAJ Invest.
Committed towards ensuring the overall growth of the micro enterprises, Aye has also launched its wholly owned “not for profit” company FAME to offer them beyond financing support.
In July 2019, it also received a debt funding of Rs 55 crore from DCB Bank to grow its loan book and credit solutions.
Recently, debt-financing startup that facilitates SME lending, Indifi Technologies (also from Gurugram), raised Rs 145 crore in Series C funding.
Flipkart Co-founder Sachin Bansal also made a debt investment of Rs 50 crore in Mumbai-based digital lending platform Kissht through his second venture BAC Acquisitions, last month. According to a company spokesperson, Kissht is looking to close a Series D round worth Rs 350 crores in the coming months.