Capital G leads $27.6m funding round in Indian fintech lender Aye Finance

Photo: Reuters

Small-business lender Aye Finance Wednesday said it has raised about $27.6 million (Rs 210 crore) in its Series E funding round led by Capital G, Alphabet’s independent growth fund.

The financing round also saw participation from Aye’s existing investors LGT Lightstone, Falcon Edge Capital, A91 Partners and MAJ Invest, the fintech lender said in a statement.

With this fresh investment, Aye’s total equity funding since inception exceeds Rs 690 crores.

“Closing major funding round during these times of economic uncertainty reinforces the value that our investors see in Aye Finance. Our loans are underwritten with cluster insights and this continues to assure good repayment behaviour in our portfolio. This equity investment will further add to liquidity that will enable us to emerge strongly from the COVID crisis and continue to benefit millions of micro-enterprises across India,” Sanjay Sharma, Managing Director, Aye Finance said.

Started by Sanjay Sharma in 2014, Aye Finance typically infuses Rs1-2 lakh into businesses with an annual turnover of Rs10-30 lakh. It underwrites the risks in these loans with a unique cluster-based model, wherein it evaluates all the people in a particular field, say, automobile workers or textile workers, and correlates behavioural tendencies.

Aye Finance claims to have disbursed Rs3000 crore transforming the micro-enterprise lending landscape and brought over 200,000 unorganised businesses into the formal lending ecosystem. Despite the disruptions brought on by the onset of COVID-19 that adversely affected the MSME sector, Aye has shown improving operating ratios in the first quarter of FY20-21, on the back of its quality lending book, the statement said.

“Aye Finance’s continued success is a testament to their industry leadership, their underwriting methodology, which combines an optimal mix of data science with a physical presence in the field, and their ability to empower a huge, unaddressed market,” said Sumiran Das, Board member and Partner at CapitalG.

In January this year, A91 Partners invested about $20 million in Aye Finance through a secondary sale of shares, acquiring the stake of Accion, Mint reported. In December, it had raised Rs107 crore as debt funding from Switzerland-based impact investor BlueOrchard.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.