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Aavishkaar Group's MSME lender Ashv Finance bags $10 mn in Series E round

By K Amoghavarsha

  • 06 Dec 2023
Aavishkaar Group's MSME lender Ashv Finance bags $10 mn in Series E round
Nikesh Sinha, managing director, Ashv Finance

Non-banking lender Ashv Finance (erstwhile Jain Sons Finlease) has raised $10 million in a Series E round, from New York-based private equity firm Encourage Capital.

According to a company statement, the capital will be used for expansion across the country. Ashv also plans to launch a new initiative to finance rooftop solar for micro and small businesses.

Intellecap, the advisory arm of impact-focussed Aavishkaar Group acted as the sole adviser to Ashv Finance for this transaction.

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"We aim to accelerate our expansion whilst improving our technology and data system. This investment marks our foray into rooftop solar finance as well. Ashv aims to disburse Rs 390 crore worth of loans to micro and small enterprises in the rooftop solar space in the next five years. This capital will also help us reach out to more MSMEs and scale our AUM to Rs 1,800-2,000 crore,” said Nikesh Kumar Sinha, managing director, Ashv Finance.

Based out of Mumbai and part of the Aavishkaar Group, Ashv Finance is a non-banking financial company (NBFC) offering cash-flow-based business loans to micro, small and medium enterprises (MSMEs).

At present, it overlooks an AUM of Rs 1,000 crore and has a presence in around 180 locations across 15 states.

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Prior to the current funding round, the startup raised $3.5 million in a Series D funding round from Developing World Markets, Triodos Investment Management BV and Aavishkaar Venture Management Services Pvt. Ltd, in 2018.

In FY22, the firm managed to clock Rs 128 crore in net sales from Rs 90 crore year-on-year, according to VCCEdge, the data research platform of VCCircle.

Ashv has also been profitable since FY19. It clocked a net profit of Rs 5.5 crore in FY22.

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This is the second investment by Encourage Capital in the Indian MSME lending space in 2023. In April, the New York-based firm acquired a significant minority stake in Svakarma Finance Pvt. Ltd, a Mumbai-based impact-focused micro, small and medium sector enterprise (MSME) financier.

Encourage Capital, which was previously known as Wolfensohn Fund Management (WFM), made the first tranche of total investment of up to $9 million in Svakarma in April and aims to invest the second tranche in the next 12-18 months.

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