[Funding]: FinTech Aye Finance raises $27 Million from Google's CapitalG and others

FinTech startup Aye Finance raised Rs 210 crore in Series-E round led by Google's PE CapitalG. The existing investors that participated in the funding round were LGT Lightstone, Falcon Edge, A91 Partners and MAJ Invest. Infact, LGT Capital now owns 17.49% shareholdings in Aye Finance and Falcon Edge owns 12.87%. In April 2020, the firm had also raised ₹ 180 Cr in debt.

About Aye Finance

Aye Finance deploys advanced statistical models and predictive analytics to make robust risk selection. These work even in the absence of formal business documents and prior credit histories.

Also called, AyeFin, the fintech has the vision to empower the SME sector in India. Sanjay Sharma and Vikram Jetly found the company in 2014 to offer B2B loans to unbanked micro-enterprises of India.

Currently, the company offers its services in 14 states. It also plans to expand into Bihar, Jharkhand, Gujarat and Maharashtra in the coming years. The company has over 173 branches and 2,900 employees. So far, the company has disbursed 2 Lakh loans amounting to INR 2,700 Cr to over 196K small scale businesses in the country.

The company also said that the disruptions brought on by the onset of COVID-19 adversely affected the MSME sector. Despite that, Aye Finance has recorded improving operating ratios in the first quarter of the financial year 2020-21.

About the deal

Gurugram-based FinTech startup Aye Finance raised INR 210 Cr ($27 Mn) in Series E funding round from existing investors. These included LGT Capital Partners, CapitalG International, Maj Invest Financial Inclusion Fund II, Falcon Edge India and A91 Emerging Fund I at a pre-money valuation of INR 1,700 Cr ($224 Mn).

As per the filings, LGT Capital invested INR 56.24 Cr in Aye Finance in exchange for 9,13,339 Series E CCPS. CapitalG has invested INR 71.24 Cr for 11,56,897 shares. Further, Maj Invest Financial Inclusion Fund II has invested INR 22.49 Cr for 3,65,336 shares. Also, Falcon Edge India has invested INR 29.99 Cr from 4,87,114 shares and A91 Emerging Fund has invested INR 29.99 Cr for 4,87,114 Series E shares.

With this fresh investment, Aye's total equity funding since inception exceeds Rs 690 crore.

What did the industry leaders have to say?

Talking about the deal, MD Sanjay Sharma said:

Closing major funding round during these times of economic uncertainty reinforces the value that our investors see in Aye Finance. This equity investment will further add to liquidity that will enable us to emerge strongly from the COVID-19 crisis.

"Aye Finance's continued success is a testament to their industry leadership, their underwriting methodology, which combines an optimal mix of data science with a physical presence in the field, and their ability to empower a huge, unaddressed market," Sumiran Das, board member and partner at CapitalG, said.