Microlending Startup Aye Finance Raises INR 250 Cr from Singapore’s ABC Impact, To Fuel Expansion

Nearly a month after concluding a loan securitization deal with Goldman Sachs Finance, lending tech company Aye Finance has raised INR 250 crore (approximately $30 million) in a Series G fundraising round headed by Singapore-based impact investor ABC Impact.

The investment round also included Aye Finance’s current investor British International Investment (BII), who led its INR 310 Cr Series F funding round in December of last year.

The new purchase also represents the first investment from ABC Impact’s fund II.

Sanjay Sharma, founder and managing director of Aye Finance, stated, “We are delighted to collaborate with ABC Impact in this round and look forward to maximising impact. This cash infusion will allow us to expand our operations and improve our ability to provide value to our target market of micro firms.”

“Our collaboration with Aye Finance will provide micro-entrepreneurs with better access to credit, allowing them to grow their businesses and reach their full potential,” said Sugandhi Matta, chief impact officer at ABC Impact.

“Their focused use of technology has enabled scalable growth across the country, positioning them as a notable lender for their target segment,” Mr. Matta said.

Related: DGGI Finds INR 81,875 Cr Worth Tax Evaded in Indian Online Gaming Industry In FY24

Aye Finance, founded in 2014 by Sharma and Vikram Jetley, provides cheap business loans to small enterprises throughout the country. It assesses risk without the need of typical business documentation by combining cluster-based credit assessment with AI algorithms.

This development comes at a time when loan firms have piqued the interest of investors with ambitions to extend their offerings.

For example, lending software firm Fibe (previously EarlySalary) raised $90 million in its Series E fundraising round for business expansion, product line strengthening, and portfolio diversification.

In addition, Arthan Finance, a non-banking financial corporation (NBFC), raised INR 50 crore ($5.98 million) as part of its Series B investment round to increase its assets under management and extend its footprint in India.

Meanwhile, Supermoney, a digital lending company, raised INR 28.6 crore ($3.4 million) in a Series A fundraising round to expand its operations and improve loan disbursements.

Aye Finance has also raised capital in the form of debt funding twice this year, for INR 250 crore (approximately $30 million) from Dutch entrepreneurial development bank FMO in June and INR 137 crore from German impact investment and portfolio management firm Invest in Visions in March, to disburse loans to underserved micro, small, and medium enterprises (MSMEs) across India.

According to the company’s statement, the current round of fundraising brings the equity raise to INR 1,250 crore.