Gurugram-based fintech startup Aye Finance has raised ₹70 crores ($10 million) in debt funding from impact-focused investor Northern Arc and global impact investment manager responsAbility through Non-Convertible Debentures. The startup plans to use the freshly raised funds to increase its lending portfolio and offer affordable business loans to multiple small businesses in India.
Mr. Sanjay Sharma, Managing Director of Aye Finance said, “I believe the market needs to be addressed by us is very large, and has enabled the inclusion of over 100,000 micro-entrepreneurs, we have established that our unique Cluster-Based Credit Assessment methodology has the capability to scale up rapidly while delivering good value to our customers. And despite the bearish sentiments in the market, we have continued to get support from the industry in our mission to transform microenterprise lending in India, as we continue to demonstrate robust metrics on growth and quality.”
Founded by Vikram Jetley and Sanjay Sharma in 2014, Aye Finance provides financial products and services to micro and small businesses. With over 104 branches across the country, the startup helps small businesses in 11 states. There are thousands of profitable small and micro businesses across India which are locked out of the financial system. Though these microenterprises employ millions of people, their biggest barrier to growth is lack of access to capital.
Mr Jaskirat S. Chadha, Senior Investment Officer at responsAbility, said, “responsAbility-managed funds have been providing funding for financial institutions targeting micro, small and medium-sized enterprises for the past 15 years. We are pleased to partner with Aye Finance, a successful player that leverages its technology backbone to drive financial inclusion and promote the economic growth of un-organized business enterprises.”
Aye Finance has raised ₹555.8 crores ($79.4 million) in 12 funding rounds. In November and July last year, the firm raised ₹72 crores ($10.28 million) and ₹70 crores ($10 million) respectively. Prior to that, it raised ₹150.5 crores ($21.5 million) in series C round in June 2018. The startup is backed by investors like BlueOrchard Finance S A, Micro Vest, Triple Jump, Capital G, SAIF Partners, IntelleGrow and Hinduja Leyland Finance.
Mr Jaskirat S. Chadha, Senior Investment Officer at responsAbility, said, “responsAbility-managed funds have been providing funding for financial institutions targeting micro, small and medium-sized enterprises for the past 15 years. We are pleased to partner with Aye Finance, a successful player that leverages its technology backbone to drive financial inclusion and promote the economic growth of un-organized business enterprises.”
The company has disbursed more than ₹1,000 crores to over 80,000 micro businesses in India. Both the founders created a technology-enabled process to build credit score and insights using several data points like an available business, supply chain and psychometric data. Aye Finance competes with LendingKart, LendBox and Veritas Finance.
