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A91 Partners buys Accion’s stake in SME lender Aye Finance
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US-based non-profit organisation Accion International has sold its stake in non-banking financial company Aye Finance Pvt. Ltd, which has continued to raise funds at a breakneck pace in recent months.

Accion has sold its stake to A91 Partners, Aye said in a statement. A91 is a venture capital firm founded by former Sequoia Capital India executives Abhay Pandey, VT Bharadwaj, Gautam Mago and Kaushik Anand.

Accion had originally participated in Aye’s seed funding round in 2015 along with multi-stage investment firm SAIF Partners. At the time, Accion had picked up a 15% stake in the company, according to VCCEdge, the data research platform of Mosaic Digital.

The financial inclusion-focussed firm invested at least twice more in the non-banking company, according to VCCEdge. It invested another $1.56 million in 2015 and $2.70 million in 2016.

Aye Finance did not disclose the financial details of the investment. 

A report in Mint said Accion got a return of three times through the exit from its initial investment. Aye is also preparing for another equity fundraise and is scouting for an investment banker to manage the process, the report added, citing people privy to the development.

VCCircle has reached out to Aye on this particular development and will update this report accordingly.

Anand, partner at A91, said the firm was confident in its investment in the NBFC because of its sustainable business model and the use of technology as the backbone of its operations.

Aye Finance, set up in 2014, provides working capital and business development loans to micro and small enterprises. Other investors in the Gurugram-headquartered NBFC include Falcon Edge, Contrarian Capital, LGT Impact Ventures, Northern Arc Capital, Swiss impact investor responsAbility, and the Alphabet Inc.-backed CapitalG.

In December, the financier raised Rs 107 crore ($15 million) in debt funding from Swiss impact investor BlueOrchard. The impact group has been investing in the company since May 2017 and has taken a total exposure to Rs 290 crore in the lender to small and medium-sized businesses.

That transaction came close on the heels of Aye Finance raising Rs 80 crore from one of India's leading banks in September last year. And in July, Dutch development bank FMO said it planned to invest Rs 125 crore in the company, which posted net sales of Rs 209.61 crore for the 2019 financial year. 

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