Aye Finance secures $27.7 mn in a growth round led by PE arm of Alphabet

Gurugram based Aye Finance, a micro-enterprises lender, on Wednesday said it has raised $27.7 million in a growth stage funding round, dubbed as Series E, led by returning investor CapitalG, the private equity arm of Google parent Alphabet.

Other returning investors in the round included venture capital firms LGT Lightstone, Falcon Edge, A91 Partners and asset management firm MAJ Invest, a statement said.

“This equity investment will further add to liquidity that will enable us to emerge strong from the Covid-19 crisis and continue to benefit millions of micro-enterprises across India,” Sanjay Sharma, co-founder and managing director at Aye Finance said.

Including the latest investment, the startup has raised over $91 million in a mix of equity and debt. SAIF Partners and Northern ARC Capital are among its other investors.

In March and April, it raised $23.8 million in debt from lenders in India and abroad.

"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.

Founded in 2014 by Sharma and Vikram Jaitley, Aye Finance claims to have disbursed loans amounting to about $396 million in the micro enterprise lending landscape. It also brought over 200,000 unorganised businesses into the formal lending ecosystem.

The startup has a presence across 18 states through its 173 offices.

The non-banking financial company provides mortgage, hypothecation and term loan services. It claims to deploy advanced statistical models and predictive analytics to make risk selection that works even in the absence of formal business documents and prior credit histories.

Other India-based investments of Alphabet’s CapitalG include edtech startup Cuemath, car marketplace Cardekho, healthtech platform Practo and real estate portal Commonfloor.