Home-grown private equity firm ChrysCapital led a Rs 350-crore ($55-million) Series C funding round in Bengaluru-based school finance company Thirumeni Finance Pvt. Ltd, which operates under the Varthana brand.
Thirumeni Finance said the investment was a combination of primary infusion and secondary stake sale by early-stage investors. Existing investors, Elevar Equity, LGT Impact, Omidyar Network and Kaizen Private Equity also participated in the round.
The non-banking financial company provides loans to schools for expanding or improving their infrastructure, besides investing in solutions that help improve student learning outcomes.The loans are primarily given to private schools catering to students from low-income households.
Varthana, which was launched by Brajesh Mishra and Steve Hardgrave in 2013, supports 3,500-plus schools, comprising 84,000 teachers and 2.5 million students, according to the press note.
Hardgrave and Mishra said in a joint-statement that ChrysCapital’s experience in helping companies grow to new heights will help Varthana to build on its early progress.
“ChrysCapital believes that Varthana is well poised to create a dominant platform in a niche segment, given a very passionate set of entrepreneurs along with a deep network, excellent customer relationships and a committed workforce,” said Ashish Agrawal, director, ChrysCapital.
Last October, the company had raised Rs 20 crore ($3 million) from Michael and Susan Dell Foundation.
In 2016, it had raised Rs 93 crore in its Series B round led by Kaizen Private Equity and Zephyr Peacock India. Its existing investors, Elevar Equity, LGT Impact and Omidyar Network have also participated in the current round.
Founded in 1999, ChrysCapital has an asset base of over $3 billion across seven funds.
The PE firm had marked the final close of its seventh fund at $600 million in February last year. It invests across sectors including business services, financial, pharmaceuticals and healthcare, consumer and manufacturing.
In the financial services segment, it has backed Au Small Finance Bank, Hero FinCorp, Magma Fincorp Ltd, National Stock Exchange and South India Bank.
According to its website, its previous bets include Axis Bank, Bajaj Auto Finance, Centurion Bank of Punjab, ING Vysya Bank, Mahindra Finance, Shriram City Union, Shriram Commercial Vehicle Finance, Yes Bank and Federal Bank.
NBFCs focussing on lending to educational institutions include Shiksha Financial Services India Pvt. Ltd, Indian School Finance Company Pvt. Ltd and Auxilo Finserve Pvt. Ltd.
In March, Auxilo Finserve Pvt. Ltd had raised Rs 37.5 crore from sugar manufacturing company Balrampur Chini Mills Ltd.
Indian School Finance Company is on the road to raise around $25 million in equity funding and was in advanced talks with a few fund managers.
In its latest funding round, Shiksha had received about Rs 14 crore from the Michael & Susan Dell Foundation and Aspada Investment Company.