Vastu Housing Finance Corporation Ltd on Friday said it has raised $200 million (around Rs 1,460 crore) in a financing round from a consortium led by Norwest Venture Partners, Creation Investments, and IIFL Asset Management.
The transaction involves two components, a primary infusion of $125 million (Rs 925 crore) and the balance is a secondary sale by current investors.
Vastu said with the fresh investment it will further scale operations in existing locations, explore new markets and invest in the next-generation technology platform to enhance customer experience. Vastu also plans to hire 1,000 additional team members across functions over the next 12 months.
“With this investment, Vastu will further consolidate operations in 13 states its currently present and build products to provide easy, faster and affordable credit for 900 million population residing in these states,” Sandeep Menon, founder, MD & CEO of Vastu, said.
Vastu, set up in 2015 by Menon and Sujay Patil, is a digitally enabled retail affordable housing finance company with a pan-India presence. The company has assets under management of around $400 million, and has a presence in 13 states across India, and has over 1,200+ employees.
The company also set up a non-banking finance company (NBFC) – Vastu Finserve -- venturing into vehicle and MSME finance.
Before this investment, Vastu was recently upgraded to [ICRA] A+ and assigned the highest rating on a short-term scale of [ICRA] A1+ by ICRA Ltd.
Vastu is majority-owned by funds managed by Multiples Alternate Asset Management.
Current round investors
Norwest Venture Partners is a multi-stage investment firm that manages $9.5 billion in capital and has funded more than 600 companies since its inception. In India, Norwest Venture Partners makes early to mid-stage venture capital investments and growth investments in companies. The sector-agnostic fund has backed firms like Kotak Mahindra Bank, Swiggy, NSE, Five Star Business Finance, OFBusiness, Ess Kay Fincorp, and Veritas Finance among others.
Creation is a global alternative investment manager with an AUM of $1.5 billion. Creation invests exclusively in companies that provide financial services in emerging markets. Its investments in India include Fusion Microfinance, Muthoot Microfin, Ofbusiness, Progcap, and Vivriti Capital.
IIFL Asset Management is a subsidiary of IIFL Wealth Management Ltd. IIFL Asset Management’s private equity vertical has an AUM of $2 billion. The fund is a key player in the financial services segment with investments in firms like Northern Arc, NSE, CIBIL, Kogta Financials, ICICI Lombard, Nippon Life AMC, and Indian Energy Exchange. IIFL AMC has around 12 unicorns in their portfolio including Dailyhunt, Byju’s, Upgrad, Policybazaar, Swiggy, Unacademy, Pinelabs, Zomato, and Swiggy
Deals in the housing finance segment
This week, BASIC Home Loan raised $3.5 million in Series A funding led by Venture Catalysts (VCats) and Gruhas Proptech.
Earlier this month, Aviom India Housing Finance, which focuses on secured home loans and loans against property in Tier-II and Tier-III towns raised $8 million (around Rs 59 crore) in Series C funding from Sabre Partners.
In September, Gurugram-based Ummeed Housing Finance raised Rs 270 crore ($37 million) in its Series E funding round led by Norwest Venture Partners and joined by existing investor Morgan Stanley Private Equity Asia.
In the same month, Homeville Consulting Pvt Ltd, a housing credit enablement network raised $7 million (around Rs 52 crore) from 9Unicorns, Varanium NexGen Fund, and others.