Avanse Financial Raises INR 1,000 Cr From Mubadala Investment, Avendus

Education-focussed non-banking financial company (NBFC) Avanse Financial Services has raised a primary capital of INR 1,000 Cr ($120 Mn) led by Abu Dhabi-based investment firm Mubadala Investment Company. 

The funding round also saw participation from Avendus PE Investment Advisors Private Limited via its Avendus Future Leaders Fund II. 

Avanse will use the fresh funds to strengthen its position in the education financing segment, focusing on creating unique customer experiences while achieving sustained profitable growth.

The development comes a month after a report said that Avendus was raising fresh capital from Mubadala, along with Kotak Pre-IPO Opportunities Fund and Avendus Future Leaders Fund. The report pegged the funding amount at INR 1,100 Cr.

Founded in 2013, Avanse provides education financing for students and educational institutions in India. Its financing solutions cater to students’ higher education abroad and in India as well as skill enhancement loans in India. The NBFC said that as of December 2023, it had asset under management (AUM) of about INR 12,147 Cr.

Speaking on the fundraise, Amit Gainda, MD and CEO of Avanse Financial Services, said, “The growth capital will enable us to strengthen our brand proposition, integrate digital solutions, and innovate to build more depth into our product range as we work towards delivering greater stakeholder value.”

“The influx of capital will assist us in fulfilling a larger number of academic aspirations,” he added.

Avanse is backed by marquee investors like Warburg Pincus, Kedaara Capital, and International Finance Corporation.

“Avanse, driven by its vision to democratise education in India, has transformed into one of India’s premier education finance companies,” said Narendra Ostawal, MD and head of India at Warburg Pincus.

In early 2023, Avanse raised INR 800 Cr from private equity firm Kedaara Capital. Prior to that, in 2020, it raised $15 Mn via the external commercial borrowing (ECB) route from World Business Capital Inc.

Avanse competes with the likes of Eduvanz and Leap Finance. 

As per a report published by CARE ratings last year, NBFCs almost doubled their market share in retail education loans to 18.6% between September 2020 and September 2022. The report said that the market share gains of NBFCs were driven by overseas student education loans.