AYE Finance raises $21.5 mm from CapitalG and existing investors in Series C equity round

AYE Finance raises $21.5 mm from CapitalG and existing investors in Series C equity round

New Delhi: Gurgaon based AYE Finance (“AYE”), a Non-Banking Financial Company, has become the first finance company in India to have received the equity investment from CapitalG (formerly Google Capital). In its Series C round, Aye raised Rs. 147 crores ($21.5 million).

Its existing investors SAIF Partners and LGT participated in the equity round too. AYE will be using these funds to fuel business growth and maintain the lead in its financial technology. Bangalore based Unitus Capital acted as the transaction advisor to AYE, while JSA and Induslaw acted as legal advisors to the transaction.

Aye Finance P Ltd is a new age finance company started in March 2014 by two seasoned bankers – Sanjay Sharma and Vikram Jetley. The company is focused on solving the funding problems of the micro enterprises that have so far relied only on informal sources of financing like the money lenders or chit funds.

AYE provides innovative working capital and business development loans to underserved micro and small enterprises using a unique cluster-based approach, supported by a proprietary underwriting methodology. Its operations are spread across 72 branches in 10 states.

Use of data sciences and digital technology enables Aye Finance to keep operating costs low and overcome the obstacles of inadequate documentation of incomes of their customers. The Company has in the first 4 years deployed over 60,000 loans to micro enterprise owners across India and enabled them to grow their businesses.

Talking about the fund raise, Sanjay Sharma, Founder and Managing Director, AYE said, “We are very excited about our partnership with CapitalG. We have used insightful data models and technology to provide affordable business loans to the financially excluded micro enterprises across India. CapitalG’s access to Google expertise in scaling businesses using analytics and technology will strongly supplement our approach. We are at an exciting juncture, where the business model has been proven and is also scaling well. We intend to cover the large unaddressed MSME finance market that other finance providers have found difficult to service. We are happy that our present investors, SAIF Partners and LGT, have also participated in the latest round of equity, reinstating their faith in AYE’s ability to transform micro and small scale enterprise financing in India”

“MSMEs form the backbone of the Indian economy and contribute a large portion of its GDP, however, they lack access to formal credit. Over the last few years, AYE has proven that their model is one of the most efficient ways to deliver credit to underserved MSMEs across industry clusters. We look forward to working with AYE and helping them use technology to address under penetrated segments of the MSME credit market.” said Kaushik Anand, India Head, CapitalG

“AYE is a great company using very innovative methods of underwriting and customer acquisition to serve the small and micro enterprises. We have been a partner since AYE’s beginning and have seen it grow and mature to its current level. We continue to be excited about AYE’s future and are happy to support the company in this round as well.” said Vivek Mathur, Managing Director, SAIF Partners

“We continue to be impressed by the AYE team and their capability to effectively scale the business model across 10 states. AYE’s business is inherently impactful, as it fuels entrepreneurship at the grassroot level. We partnered with AYE in their previous capital raise and continue to stay committed. We have participated in the latest capital raise and look forward to seeing the company grow further.” said Rajat Arora, India Investment Director, LGT Impact

“Unitus Capital is proud to have worked with AYE finance on its current and last rounds of capital raise. AYE is one of the most innovative, new-age SME lending NBFCs with an impressive team. They have a robust growth record and a strong focus on business fundamentals. This has helped attract strong investor interest. AYE’s business model is scalable and has the potential to create long-term sustainable impact. We pride ourselves on getting the best investors for our clients and that remains the top reason for our clients coming back to us. We are happy to have brought in CapitalG to partner with AYE and look forward to a fruitful partnership between the two.” said Richa Natarajan, Director, Unitus Capital