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Aye Finance raises Rs 210 crore in Series-E, led by CapitalG, Alphabet’s growth fund

Aye Finance raises Rs 210 crore in Series-E, led by CapitalG, Alphabet’s growth fund

Aye Finance raises Rs 210 crore in Series-E, led by CapitalG, Alphabet’s growth fund
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By Megha Vishwanath  Jun 25, 2020 6:26:20 AM IST (Updated)

Aye Finance, a startup that provides loans to MSMEs, has raised Rs 210 crore in Series-E funding, led by CapitalG, Alphabet’s independent growth fund. The funding round also saw participation from Aye’s existing investors LGT Lightstone, Falcon Edge Capital, A91 Partners and MAJ Invest.

Aye Finance, a startup that provides loans to MSMEs, has raised Rs 210 crore in Series-E funding, led by CapitalG, Alphabet’s independent growth fund. The funding round also saw participation from Aye’s existing investors LGT Lightstone, Falcon Edge Capital, A91 Partners and MAJ Invest.

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With this fresh investment, Aye’s total equity funding since inception exceeds Rs 690 crore.
Aye claims since its inception in 2014 it has disbursed Rs 3,000 crore to micro enterprise lending landscape and brought more than two hundred thousand unorganised businesses into the formal lending ecosystem.
The fintech lender says it deploys advanced statistical models and predictive analytics to make robust risk selection that works even in the absence of formal business documents and prior credit histories.
Despite disruptions by the COVID-19 crisis that adversely affected the MSME sector, Aye has improved operating ratios in the first quarter of FY20-21, on the back of its quality lending book.
Sanjay Sharma, managing director, Aye Finance, says, “Closing a major funding round during these times of economic uncertainty reinforces the value that our investors see in Aye Finance. Difficult times are a true test of a good lender and we have already started showing significant improvements in the customer repayments in the past months.”
“Our loans are underwritten with cluster insights and this continues to assure good repayment behaviour in our portfolio. Our deep connect with customers, our engaged team that rates us as a great place to work, our extensive presence on the field, supported with automation, is a huge differentiator that enables us to optimally restrict credit losses. This equity investment will further add to liquidity that will enable us to emerge strong from the Covid crisis and continue to benefit millions of micro enterprises across India.”
"Aye Finance's continued success is a testament to their industry leadership, their underwriting methodology, which combines an optimal mix of data science with physical presence in the field, and their ability to empower a huge, unaddressed market,” says Sumiran Das, Board member and Partner at CapitalG.
Kartik Srivatsa, managing partner of LGT Lightstone Aspada, explains, “We first invested in Aye in 2016 and over the years we have seen them grow into a canonical institution with strong focus on impact and scalability. The relevance of Aye in the post-covid economy in serving the financing needs of micro businesses is significant and we are excited to invest further in the growth journey of Aye.”
Navroz D Udwadia, co-founder and partner at Falcon Edge Capital, emphasised, “We focused on MSME and SME lending as a significant yet under-served financing opportunity with healthy unit economics and a large, fragmented addressable market. We are excited to continue to back Aye Finance on this next leg of growth as they bring credit to India’s under-served MSMEs via a thoughtful and risk adjusted cluster-based approach.”
Kaushik Anand, partner at A91 Partners, said the company's leadership has responded robustly to the challenges COVID-19 has presented. What Aye Finance provides has never been more important to India's micro enterprises and A91 Partners is glad to hear customers echo that sentiment, he adds.
David Paradiso, partner at Maj Invest, comments: “We are excited to continue our support of Aye Finance and its management team. We are happy to contribute to the scaling up of the business to continue providing top quality products to our customers”
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