In its first financial services bet in India, Mubadala leads Avanse's $120m funding

In its first financial services bet in India, Mubadala leads Avanse's $120m funding

Photographer: Jonathan Drake/Bloomberg News

Warburg Pincus-backed educational loan provider Avanse Financial Services has raised Rs 1,000 crore ($120.6 million) in equity led by Abu Dhabi sovereign wealth fund Mubadala Investment Company.

Avendus PE Investment Advisors Private Limited, via its fund Avendus Future Leaders Fund II, also participated in the financing.

With the fresh capital, Avanse is expected to strengthen its position in the rapidly evolving education financing segment by focusing on creating unique customer experiences and achieving sustained profitable growth.

The investment by Mubadala, through its affiliate Alpha Investment Company LLC, is the first by the investor in the financial services sector in India and is part of its plan to double its overall exposure in Asia by 2030. Its $276 billion portfolio spans six continents with interests in multiple sectors and asset classes.

Other investees of Mubadala in India include Tata Power Renewables and Jio Platforms.

Some of the Indian startups operating in the education financing space are Eduvanz, Leap Finance, Indian School Finance Company (ISFC), MPOWER Financing, and Propelld.

Last year, MPOWER Financing closed a $150 million debt financing from Goldman Sachs. In 2023, Sequoia-backed Uduvanz had raised $12.6 million from new and existing investors, while Leap, an overseas education-focused guidance and financing platform, secured $75 million in a Series D funding round led by Silicon Valley-based Owl Ventures.

Warburg Pincus acquired an 80% stake in Avanse Financial Services from Wadhawan Global Capital Ltd and its unit Dewan Housing Finance Corporation Ltd (DHFL) in March 2019. As of December 2023, the company’s AUM stands at 5.5 billion dirhams.

So far, Avanse has raised $375 million over seven funding rounds.

Last year, Avanse received $98 million (Rs 800 crore) in funding from private equity firm Kedaara Capital. In 2022, Avanse secured about $49 million (Rs 390 crore) from existing shareholders—Warburg Pincus, a global private equity firm; and International Finance Corporation (IFC), a part of the World Bank Group—through a rights issue.

Edited by: Pramod Mathew

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