Washington, DC, December 10, 2018 – Accion Venture Lab, the seed-stage investment initiative of global nonprofit Accion, announced today that it has successfully completed its third investment exit, selling its stake in Indian fintech company Aye Finance (Aye). Founded in 2014, Aye is an Indian non-banking finance company that uses a cluster-based approach to provide working capital loans to micro, small, and medium enterprises (MSMEs). Accion maintains an investment through its later-stage initiative Accion Global Investments and continues to provide advisory services to the company.
In early 2015, Venture Lab co-led Aye’s first institutional investment round when it had just begun its lending operations. Venture Lab also provided significant portfolio engagement support — including through a position on the company’s board — and later provided additional funding. After Aye demonstrated success at its early stages, Accion provided further capital and advisory support to help the company continue to scale. Less than four years after Venture Lab’s initial investment, Aye now serves over 70,000 clients and has loaned roughly $100 million to MSMEs that would otherwise be left out of the formal financial system.
“Aye Finance has been instrumental in empowering India’s entrepreneurs, who are often ignored by traditional banks. This is exactly why Accion has supported Aye’s growth from an early stage. As Aye continues to thrive, Accion Venture Lab can exit knowing Aye is on a clear trajectory to grow and continue to help the underserved,” said Michael Schlein, President and CEO of Accion.
Throughout Accion’s work with Aye, Accion has partnered with the company on a number of advisory projects on a range of topics including reaching new customers, integrating data analytics for improved decision making, and developing risk management practices. Recently, Accion Global Advisory Solutions worked with Aye on the design of a mobile app that allows its customers to digitally record sales and purchase transactions, which in turn can help Aye improve its lending decisions.
“We saw tremendous potential in Aye’s innovative model, underwriting approach, and the opportunity to bring financial services to India’s underserved,” said Vikas Raj, Managing Director at Accion Venture Lab. “We’re honored to have been part of the company’s success to date and we’re confident that Aye’s later-stage investors, including Accion through its Global Investments vehicle, can help drive the company toward continued scale and impact.”
“Aye Finance has provided loans to over 70,000 micro enterprises that had so far been excluded from formal finance. Our business has grown rapidly and the early capital and advisory support from Accion Venture Lab has been of great value in providing solidity to our early growth. They have been a supportive investor and we continue to benefit mutually from our relationship with them,” said Sanjay Sharma, Managing Director and co-founder of Aye Finance.
Venture Lab invests capital in and provides support to innovative fintech startups that improve access, quality, and affordability of financial services for the underserved at scale. Since launching in 2012, Venture Lab has invested in more than 35 early-stage startups that operate in over 25 countries worldwide. Venture Lab previously announced exits from Palo Alto and Mexico City-based payments solutions company Clip in February 2017 and India-based lender Varthana in November 2016.
Accion is a global nonprofit committed to creating a financially inclusive world, with a pioneering legacy in microfinance and fintech impact investing. We catalyze financial service providers to deliver high-quality, affordable solutions at scale for the three billion people who are left out of — or poorly served by — the financial sector. For more than 50 years, Accion has helped tens of millions of people through its work with more than 90 partners in 40 countries. More at http://www.accion.org.
About Aye Finance
Founded in 2014, Aye Finance is a leading MSME lender providing business loans to micro enterprises across India. Headquartered in Gurgaon, it has 104 branches across 101 cities employing over 1700 employees. With its innovated approach to assessing the risk of these credit-starved micro businesses the “Cluster-Based Credit Methodology” and a range of automation and system solutions, Aye is successfully bridging the gap between the MSMEs and organized lending having extended a line of credit to over 95,000 micro enterprises in India.