India: Five-Star Business Finance raises $234m from Sequoia, KKR, others

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Five-Star Business Finance Limited, a South India-focused lender to small businesses, has raised $234 million from a consortium of leading global and Indian investment firms.

The funding round was led by existing investors Sequoia Capital India, Norwest Venture Partners, as well as new investors namely KKR and TVS Capital, the company said in a statement. It included primary capital and a secondary sale of shares by Morgan Stanley Private Equity. The company’s other existing investors – Martix Partners and TPG Capital – will continue to stay invested.

The investment valued the company at $1.4 billion.

Five Star plans to use the capital to expand its lending business, the statement added.

“In our mission of funding the unfunded, we have created a niche for ourselves empowering small businesses and the self-employed across corners of India by providing them with reliable and responsible funding alternatives. We aim to achieve this social goal through grass-root efforts without compromising on the pillars of asset quality and profitability that are needed to build a sustainable institution of scale,” D Lakshmipathy, Five-Star Business Finance Chairman and Managing Director D Lakshmipathy said.

Five Star operates 262 branches across eight states of India in the Southern and Central part of the country. As of December 31, 2020, the company’s AUM stood at Rs 4,030 crore, and its GNPA stood at 1.29%.

Meanwhile, KKR’s investment, which is a part of its global impact strategy, marks KKR Global Impact Fund’s second investment in India and fifth in Asia Pacific.

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.