PC: Medial
A big development in the fintech landscape has come through with Aye Finance raising a big Rs 250 crore ($30 million) funding in its latest Series G funding round with Singaporean ABC Impact emerging as the dominant investor. This infusion is substantial for Aye Finance, which should boost its growth trajectory further and increase its possibility of reaching out into the micro and small enterprise financing segment.
The Series G round saw active participation from British International Investment, Britain’s leading development finance institution and impact investor, which had led the Aye Series F round earlier with an investment of Rs 310 crore or around $37 million in December last year. Interestingly, Aye Finance also managed to raise $30 million in debt financing earlier this year, which once again emphasized its ability to attract and court numerous other funding sources and strategic partnerships to further the mission of enabling small businesses across India.
This latest investment milestone is important for ABC Impact as it is the first investment from Fund II, raising the firm’s AUM to an impressive over $850 million. The deal is completing on standard conditions precedent ensuring a smooth process towards transaction. The fundraise from Series G means Aye Finance’s cumulative equity raise now reaches an impressive Rs 1,250 crore or $150 million and underlines growing market presence, as well as investor confidence in the business model and its growth prospects.
Specializing in providing customized financial services to micro and small enterprises, Aye Finance caters to over 398 locations spread across 22 states in India. The group has a significant presence in the manufacturing, trading, and services sectors. The company’s portfolio consists of three key loan products: quasi-mortgage loans, hypothetical loans, and add-on loans catering to the unique financing requirements of the large customer base. With the motto of having reached over Rs 7,600 crore ($915 million) in loans over more than 5,76,000 businesses, with an impressive repeat rate of 60% that speaks of customer satisfaction and loyalty, Aye Finance is today at the forefront among its peers in offering affordable, transparent loans for small and micro-enterprises.
On the lines of financial performance, Aye Finance reported a robust revenue growth of 44.5% to Rs 623 crore during the financial year 2023, along with a commendable profit of Rs 54 crore. This became the perfect foundation for the company, as the company went on to experience exponential growth in the subsequent financial year 2024 where profits grew three times over to Rs 161 crore and revenue increased a staggering 67% to Rs 1,072 crore, testifying to the strength and ability of the company in capitalizing on market opportunities.
As of the end of financial year 2024, Aye Finance had AUMs of Rs 4,500 crore and a gross NPA ratio at 1.21%. A very competitive landscape dominated by prominent NBFCs, such as Indifi and Axio formerly Capital Float, Lendingkart, Flexiloans, among others, has allowed Aye Finance to carve its niche through customer-centric focus, innovative products, and robust financial performance for developing its microfinance business.
