Aye Finance Bags INR 250 Cr From Singapore’s ABC Impact, Others To Bolster Its MSME Lending Play

Nearly a month after closing the loan securitisation deal with Goldman Sachs Finance, lending tech startup Aye Finance has now secured INR 250 Cr (around $30 Mn) in a Series G funding round led by Singapore-based impact investor ABC Impact.

The funding round also saw participation from Aye Finance’s existing investor British International Investment (BII), which led its Series F funding round of INR 310 Cr in December last year.

The latest transaction also marks maiden investment made from ABC Impact’s fund II.

Sanjay Sharma, founder and managing director of Aye Finance said, “We are delighted to partner with ABC Impact in this round and look forward to maximizing impact. This capital infusion will enable us to scale our operations and enhance our ability to deliver value to our target segment of micro enterprises.” 

“Our partnership with Aye Finance will support micro-entrepreneurs with better access to credit so that they can grow their businesses and realize 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,” Matta added.

Founded in 2014 by Sharma and Vikram Jetley, Aye Finance offers affordable business loans to small businesses across the country. It uses cluster-based credit assessment with AI algorithms to assess risk in the absence of traditional business documents.

This development comes at a time when lending startups have gained the interests of investors with their plans of expanding their services.

For instance, lending tech startup Fibe (formerly EarlySalary) bagged $90 Mn in its Series E funding round for business expansion, strengthening existing product lines and to diversify its impact loans portfolio. 

Additionally, non banking financial company (NBFC) Arthan Finance raised INR 50 Cr ($5.98 Mn) as part of its Series B funding round to grow its assets under management and expand footprint in India.

Meanwhile, Supermoney, a digital lending platform, secured INR 28.6 Cr ($3.4 Mn) in a Series A funding round to expand Supermoney’s operations and increase loan disbursements. 

Aye Finance has also raised capital in the form of debt funding twice this year, of INR 250 Cr (around $30 Mn) from Dutch entrepreneurial development bank FMO in June, and INR 137 Cr 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.

With the current round of funding, the Gurugram-based company’s equity raise stands at INR 1,250 Cr, said the company in a statement.