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Aye Finance raises funding from Falcon Edge, CapitalG, others
Photo Credit: VCCircle

Non-banking financial company Aye Finance Pvt. Ltd has raised around Rs 253 crore ($36 million at current exchange rate) through a mix of equity and debt funding led by Falcon Edge Capital, filings with the Registrar of Companies show.

The development comes a little more than a month after VCCircle reported that Falcon Edge was in discussions to invest in the Gurugram-based lender.

The company raised Rs 233.32 crore ($33.3 million) in equity financing from the following: Hedge fund Falcon Edge; CapitalG, a growth equity fund floated by Google's parent firm, Alphabet Inc.; Zurich-headquartered LGT Capital; and MAJ Invest, an asset management firm based out of Denmark.

Falcon Edge led the round with Rs 155.53 crore while CapitalG contributed Rs 33.32 crore, LGT invested Rs 29.2 crore and MAJ put in Rs 15.57 crore.

Additionally, the company raised Rs 20 crore from Karvy Capital Ltd, the asset management arm of financial services firm Karvy Group. The funding was raised through secured non-convertible debentures (NCDs).

The fundraising comes in just a month after it raised $10 million in debt funding from Swiss asset manager ResponsAbility Investments AG and homegrown firm Northern Arc Capital.

In June last year, the company had raised Rs 147 crore in its Series C round of funding from CapitalG as well as existing investors SAIF Partners and LGT Impact Ventures.

In November 2016, Aye Finance had closed its Series B funding round at $10 million led by Zurich-based LGT Impact Ventures and existing investors SAIF Partners and Accion.

In February 2015, SAIF and Accion had co-invested an undisclosed sum in the company and followed it up with $3 million infusion in December 2015.

Aye Finance provides working capital and business development loans to micro and small enterprises using a cluster-based approach, supported by a proprietary underwriting methodology. It operates in 11 states and has 104 branches.

A March 2018 report by ratings firm ICRA said Aye Finance identifies business clusters and performs a preliminary market research to understand the dynamics of the cluster by interacting with buyers, suppliers and manufacturers. Once a cluster is selected, the company opens a branch and starts lending to that cluster.

Sanjay Sharma, founder and managing director at Aye Finance, had said last year that the company uses data models and technology to provide affordable business loans to micro enterprises across India.

Gurugram-based Aye Finance was founded in 2014 by Sanjay Sharma and Vikram Jetley, both former executives at Ujjivan Financial Services, the holding firm for Ujjivan Small Finance Bank.

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