Online Lending Startup Aye Finance Bags $3.8 Mn From Hinduja Leyland Finance And IntelleGrow

Gurugram-headquartered online lending startup Aye Finance has raised $3.8 Mn (INR 25 Cr) from three investors, including Hinduja Leyland Finance and IntelleGrow, which provides debt finance to growing businesses in the country. The investment, which took place through a securitisation deal, was facilitated by Vivriti Capital.

This is the second securitisation deal for Aye Finance, having earlier bagged $1.5 Mn (INR 10 Cr) by securitizing part of its portfolio in July 2017.

The latest fundraise comes less than a month after the NBFC secured $6.28 Mn (INR 40 Cr) as a term loan from IFMR Capital. The funds, as per sources, are being used to expand its online lending offerings in the MSME sector.

Commenting on the $3.8 Mn funding from Hinduja Leyland Finance and IntelleGrow, Sanjay Sharma, Founder and Managing Director of Aye Finance said, “I believe if India has to rise with a social balance, the micro businesses at the bottom of the pyramid need to be enabled and empowered. But lending to this segment poses innumerable challenges. The loan requirements of these businesses range between $774.6 and $7746.7 (INR 50,000 and INR 5 Lakh), which makes servicing these small ticket loans an expensive proposition.”

“We at Aye have not only designed our processes and automation at minimum cost but we have also partnered with various lenders, which allows us to offer economical loans, bringing this crucial sector of the economy under the inclusive fold of formal lending,” Sharma added.

Armed with the funding from Hinduja Leyland Finance and IntelleGrow, the online lending platform looks to disburse $92.8 Mn (INR 600 Cr) by the end of the current financial year.

How Aye Finance Is Servicing Underbanked Businesses In India

Incorporated in 2014, Aye Finance is a new age finance company that provides customer-centered financial services to the small and micro enterprises across India. It was founded by Sanjay Sharma and Vikram Jetley.

Headquartered in Gurugram, Aye Finance currently boasts over 72 branches across 10 states, with a workforce of more than 450 employees. As a Non-Banking Financial Company, the online lending company strives to make mortgage, hypothecation and term loan services accessible to the country’s underserved MSME sector.

Aye Finance utilises technology in mitigating the challenges faced by MSMEs in securing loans. By deploying a cloud-computing architecture and automating front-end (eCRM), the online lending startup is trying to bring down the cost of delivery.

It deploys its proprietary “Cluster Based Methodology” and alternate data insights to assess the creditworthiness of micro businesses and help the credit starved MSME sector to meet working capital and capex requirements as they look to grow their businesses.

Ultimately, the company’s vision is to leverage its technology prowess to improve the productivity of field force, detect frauds, profile risks and exercise dual control on processes.

Till date, Aye Finance claims to have disbursed over $77.4 Mn (INR 500 Cr) credit to 40,000 underbanked small businesses. Furthermore, it boasts more than 54.2 Mn (INR 350 Cr) in assets under management (AUM).

Prior to the latest fundraise from IntelleGrow and Hinduja Leyland Finance, the fintech startup secured $6.28 Mn (INR 40 Cr) as a term loan from IFMR Capital in January 2018.

Earlier, in May 2017, it raised $8 Mn from global impact investment manager Blue Orchard. The funding was raised through NCDs (non-convertible debentures) with a maturity period of five years.

Before that, in March last year, Aye Finance received a credit facility of $ 3.1 Mn from SBI. Also in November 2016, it received equity funding worth $10 Mn in a Series B round led by LGT IV,  SAIF Partners and Accion. Originally, in December 2015, the online lending company had raised Series A round of $3 Mn.

Other Players In The Online Lending Space

Aye Finance is one of the many companies that provides business loans and other forms of credit to India’s thriving and underserved MSME sector.

Other startups include Chennai-based fintech startup Veritas Finance, Lendingkart, Capital Float, Quikrupee, SMEcorner, Innoviti, Biz2credit, FlexiLoans, and KredX.

Earlier this month, Ahmedabad-based Lendingkart also raised over $87 Mn in an equity funding round as part of its Series C round. The round was led by Singapore’s Fullerton Financial Holdings Pte Ltd. along with the participation from existing investors.