Bangalore-headquartered Thirumeni Finance Pvt Ltd, a non-banking finance company that provides loans to affordable private schools, has raised Rs 27 crore ($4.43 million) in its Series A round of funding from three funds, as per a release.
Social VC fund Omidyar Network led the round while existing investors Elevar Capital and LGT Venture Philanthropy Foundation, Switzerland have also invested in Thirumeni Finance which operates under the brand name Varthana.
Varthana is also looking to raise Rs 5 crore more from domestic investors in the coming months to bring the total Series A round to Rs 32 crore.
Varthana provides loans and support to affordable private schools that cater to the poor and the emerging middle class. Launched in 2013 by Brajesh Mishra and Steve Hardgrave, the NBFC serves 400 million students in the country.
It gives unsecured loans up to Rs 5 lakh with up to a three-year tenure while it provides larger amounts for secured loans with up to a five-year tenor. The NBFC insists on funding schools with at least two years of experience which have at least 80 per cent pass percentage of its highest class or class X batch.
Presently, it serves over 300 schools in Karnataka and Maharashtra. The fresh funding will help the company extend its model to more than 15,000 schools throughout the country over four years.
“We are honoured to serve the incredible women and men who provide affordable, quality education to India’s low and middle income families. Our goal is to support these education entrepreneurs as they continue to grow their institutions,” said Steve Hardgrave, founder and CEO, Varthana.
Last year in May, global social investor Accion had disclosed it has invested in Varthana through its Venture Lab, a $10 million seed capital initiative. At the same time LGT Venture Philanthropy Foundation and Elevar Equity Advisors had participated in the seed funding round.
“While we are satisfied with our rapid growth, we are even more excited about the strong foundation we have laid in regard to systems and management. This will pave the way for much bigger things,” said Brajesh Mishra, founder and COO, Varthana.
US-headquartered Elevar Equity Advisors Pvt Ltd is an investment management company which provides equity capital to entrepreneurs, high growth microfinance institutions or institutions delivering services and products to these communities in emerging countries.
“By providing capital, Varthana enables school entrepreneurs to address urgent, basic infrastructure needs and focus on improving educational outcomes. Varthana is our 13th early stage financial services investment worldwide and we believe it holds immense potential,” said Sandeep Farias, founder & MD, Elevar Equity.
LGT VP is a global impact investor supporting organisations with financial capital in the form of grants, debt and equity in the range of $200,000 to $1 million in sectors such as education, health, agriculture & forestry, renewable energy and ICT.
“Varthana’s core loan offering enables affordable private schools to improve the quality of education and increase capacity to educate more children from low-income households. After having invested in the seed round in 2013, we are happy to continue being a part of this journey with further investment in Series A to enable the company to expand across other geographies”, says Inderpreet Singh, head of LGT VP in India.
Omidyar Network is the philanthropic investment entity founded by eBay founder Pierre Omidyar and his wife Pam. The firm has a strategy of investing through a mix of grants and equity investments.
“With real vision and solid management, Varthana fills a critical market gap by providing much-needed financial services to affordable private schools, transforming the lives of millions of Indian families. Varthana’s mission fits squarely into both the financial inclusion and education initiatives at Omidyar Network, and we are pleased to be part of its work moving forward,” said Dimple Sanghi, director of investments at Omidyar Network.
(Edited by Joby Puthuparampil Johnson)