Aye Finance raises $27.5 Mn round led by CapitalG; valuation crosses $250 Mn

Microlending platform Aye Finance has secured Rs 210 crore ($27.5 million) worth Series E funding round led by its existing backer CapitalG, Google’s venture capital fund under its parent entity Alphabet Inc. 

The regulatory filings have reflected that the company has allotted 34,09,800 Series E preference shares for Rs 615.87 per share. Share prices have increased by 44.3% as compared to the Series D funding round.

CapitalG has led the funding tranche by infusing Rs 71.25 crore, followed by LGT Lightstone with an investment Rs 56.25 crore while Falcon Edge and A91 Partners have poured in Rs 30 crore each. Denmark-based asset management company MAJ Invest has also invested Rs 22.5 crore in this funding round.  

As per Fintrackr estimates, Aye Finance will be valued nearly Rs 1,910 crore ($254.7 million) post allotment. This marks a 62% increase in the company’s valuation as compared to Rs 1,180 its Series D round. 

Aye Finance provides customer-centred financial services to micro and small businesses. It has more than 100 branches operational in 11 states across India which majorly serves segments such as manufacturing, trading, and service group, among others. 

Post allotment, SAIF Partners will remain the biggest shareholder in the company controlling 20.03% stake in the Gurugram based company, closely followed by LGT Capital who will hold 17.49%. Google’s CapitalG will control 16.42% while Falcon Edge will now hold a 13.87% stake in Aye Finance.

Co-founders Sanjay Sharma and Vikram Jetley stakes worth $24 million and $5.72 million respectively. Sharma (along with his wife Namrata) will hold a 9.4% stake while Jetley will command 2.24%. The Aye Employee Welfare Trust also holds a 1.8% stake in the company valued nearly $4.6 million.

The fresh funding for Aye Finance has come six months after it had raked in Rs 107 crore debt capital from Switzerland-based BlueOrchard in December 2019. In January this year, A91 partners had also poured in $20 million through a secondary sale of shares in the company.

It would utilize the proceeds to disburse loans to small and medium-sized enterprises who are in dire need of working capital to cope with the ongoing Covid-19 pandemic.  

Aye Finance has been good with raising equity and debt capital to fund its business model of lending to small enterprises. So far, the six-year-old company has raised more than $200 million in a mixed round of debt and equity.  Significantly, the equity infusion has come at a time when the NBFC sector is finding it difficult to raise adequate funds deployment.