Delhi, India, November 22nd, 2016 – Delhi-based, non-banking finance company AYE Finance (AYE) has closed its Series B round of funding of Rs70 crore from LGT IV and its existing investors SAIF Partners and Accion. AYE is a rapidly-growing provider of loans to micro and small, enterprises across India. It was founded in 2014 by career bankers Sanjay Sharma and Vikram Jetley. AYE uses an innovative approach to make working capital loans available to these underserved enterprises by using a proprietary innovative underwriting methodology that has allowed AYE to enhance its portfolio to more than Rs80 crore.
AYE Finance is an NBFC with a modern thinking and outlook. It has 31 branches across 7 states and has impacted the lives of more than 250,000 people. Its non-cash loan disbursement facilities along with EMI repayment has helped to maintain low cost of operations and overcome cash economy challenges. AYE is one of the few lenders in India that is positioned to effectively and profitably address the debt requirements of about 58 million micro and small enterprises and has scaled up by more than 10X during the past two years while maintaining a superior asset quality. The company will use the capital raised recently to further grow its outreach across the country with a target loan portfolio of more than Rs 2,000 crore over the next 5 years.
AYE uses an innovative industry cluster-based approach to access and evaluate borrowers and is already catering to the credit needs of more than 40 industry clusters across the country. For underwriting “thin file” customers, AYE uses proprietary technologies of industry cluster insights, psychometric mapping and business sciences for regenerating cash-flows. The loans provided by AYE are in the range of Rs 50,000 to Rs 25 lakhs and support the working capital needs of micro enterprises across India.
Commenting on the Series B fundraising round, Sanjay Sharma, Co-Founder, AYE Finance said,“We are happy to be partnering with LGT IV for the next stage of our growth. Our existing investors, SAIF and Accion too have demonstrated continued faith in us and have contributed in the current round. LGT IV, SAIF and Accion have a proven track record of investing in quality growth companies. I look forward to our association as we take AYE Finance to its next stage of evolution to achieve our common vision of providing comprehensive financial services to small and micro enterprises to power the inclusive growth of the country.”
LGT IV is a reputed international impact investor that invests growth capital in purpose-driven companies with scalable business models. It empowers underserved people with access to affordable products, services and livelihood opportunities.
Rajat Arora, Investment Manager with LGT IV India said, “We value the impressive track record of AYE in providing the much-needed financial services to MSMEs that have immense growth potential. AYE’s offering is founded on an innovative and insightful process that derives the best from its highly experienced promoters, and a high energy team united under a shared vision. We look forward to working closely with the management in the next stage of growth across geographies.”
Vishal Sood, Partner with SAIF Partners added, “We believe that AYE Finance has developed the right set of capabilities to profitably serve the underserved space of MSME Finance. Its consistent performance is a testimony to its unique business model for sourcing and evaluating borrowers efficiently and delivering superior value to its MSME customers.”
Accion has provided capital and advisory services support to AYE since its seed stage investment through Accion Venture Lab. Vikas Raj, Managing Director at Accion Venture Lab said, “AYE Finance is one of the most exciting companies in our portfolio of global investments that are focussed on using innovative underwriting and acquisition methods to serve micro and small enterprises. Through its unique cluster-based process, technology and high quality team, AYE is benefitting the large number of micro and small enterprises that are the engine of growth for the Indian economy.”
With the best blend of brick and mortar and financial technologies to deliver a low-cost and high touch-point business, AYE has successfully been able to contribute to the financial inclusion and has helped over 10,000 micro enterprises move to mainstream banking.
About Aye Finance
AYE lends to micro businesses in manufacturing, trading and service sectors which cannot access capital from mainstream financial institutions in India, as they lack sufficient documentation and credit history. It uses an Industry Cluster Enablement (ICE) approach to gain insights and strong connections within specific manufacturing, trading and service industries (e.g., shoes, brass works, garments), enabling it to efficiently target, acquire, and underwrite small-scale businesses within each cluster. Managed by bankers from large multinational and private banks and some of the best micro finance organizations in India, AYE brings the best of both the worlds – sound business practices from around the world and deep understanding of micro enterprises in India. For further information, visit www.ayefin.com.
About LGT IV
LGT Impact Ventures (LGT IV) is a private equity impact investor targeting both attractive financial returns and measurable, positive societal impact. LGT IV invests growth capital in purpose-driven companies with scalable business models which provide underserved people with access to affordable products, services and livelihood opportunities. LGT IV focuses on sectors in growth markets such as education, health, agriculture, energy, information and communication technologies. To date LGT IV has invested over USD 70 million into 17 companies across 5 world regions, improving the quality of life of 2.5 million disadvantaged people in 2015 alone. For further information, visit www.lgtiv.com.
About SAIF Partners
SAIF Partners is a leading venture capital firm with over $4B under management. SAIF provides seed, early, and growth stage capital for emerging companies in India and China. SAIF began partnering with entrepreneurs in India in 2002 and has backed over 40 companies since then including MakeMyTrip, JustDial, PayTM, BookMyShow, and Urbanladder. SAIF’s financial services portfolio spans across established businesses such as NSE, Edelweiss and KarurVysya Bank as well as emerging tech-enabled ventures such as Capital Float. For further information, visit www.saifpartners.com.
Accion is a global nonprofit dedicated to building a financially inclusive world with economic opportunity for all, by giving people the financial tools they need to improve their lives. We are building the next generation of top-tier microfinance institutions, and over more than 50 years have helped build 65 such institutions in 32 countries on four continents that today reach millions of clients. Our impact investing initiatives are pushing beyond microfinance to catalyze more than 30 innovative start-ups dedicated to improving the efficiency, reach, and scope of financial services for the poor. And our Center for Financial Inclusion is helping to build a stronger industry with high standards and broad engagement. Currently, our work spans nearly two dozen countries, including the U.S., where we are the nation’s largest nonprofit microfinance network. For further information, visit http://www.accion.org.
Unitus Capital was the exclusive advisor to Aye Finance for this transaction.