Aye Finance Raises INR 75 Cr In Debt To Strengthen On-Lending Play

Gurugram-based financial services startup Aye Finance has announced an INR 75 Cr debt raise from Netherlands-based existing investor Triple Jump BV and Northern Arc. 

Since its inception in 2014, Aye Finance has disbursed over INR 5,000 Cr to over 3.5 Lakh micro-enterprises, Google’s CapitalG-backed startup has said in a statement. 

Founded by Sanjay Sharma and Vikram Jetley, Aye Finance caters to unbanked micro-enterprises of India by offering B2B loans. With this debt fundraise, Aye Finance plans to strengthen its on-lending play.

For the uninitiated, on-lending is a term used for lenders that lend money, which they have borrowed from other organisations or investors.

Recently Aye Finance had announced the opening of 100 new centres, which took its geographical presence to 311 in 20 states. With this fresh infusion of funds, the startup now aims to make credit available for a larger population of the underserved segment of micro-enterprises.

Standing On The Shoulder Of INR 966.32 Cr Debt Fund

Aye Finance has raised debt funds from marquee ventures such as Elevation Capital, LGT, Falcon Edge Capital, A91 Partners, MAJ Invest and more than 20 other investors. Only in late 2020, Aye had raised INR 77 Cr in debt from Catalyst Trusteeship Limited through its AAV Sarl and Masala Investment Sarl, Inc42 had exclusively reported. 

Also, there were reports last year that it was eyeing about $40 Mn – $50 Mn in a Series F round between January and March 2022. Aye Finance has raised about $271.7 Mn to date in a mix of debt and equity, including the current round.

The fintech startup has played a pivotal role in funding MSMEs to ensure last-mile delivery of financial services, its investors believe. As Inc42 reported in 2020, of its cofounders also claimed that Aye was contemplating various strategies as soon as India began reporting Covid-19 cases in early February and March 2020, in order to minimise the effect of the negatively growing economy on its business in “optimistic, base and pessimistic” scenarios.

Aye Finance recorded a revenue of INR 415 Cr in the financial year ending March 31, 2020, a near 2X hike from INR 210 Cr, reported in the previous year. The startup’s profits also increased marginally to INR 40 Cr in FY20 from INR 35 Cr in FY19.

Debt Fundraise In Indian Startup Ecosystem

Venture debt has become a popular option during and following the pandemic. The year 2020 turned out to be the best year for venture debt funding in India. As per an Inc42 data report, the total venture debt funding amount in Indian startups saw a 2X surge to $427 Mn in 2020 from $217 Mn in 2019.

Indian startups raised about INR 4,500 Cr ($600 Mn) of venture debt in 2021, Moneycontrol had reported, with Alteria Capital lending about Rs 1,500 Cr to companies such as Rebel Foods and Infra.Market, while InnoVen Capital India, Trifecta Capital and Stride Ventures accounted for the remaining INR 3,000 Cr.

Delhi-based coliving startup Stanza Living recently raised $57 Mn (INR 425 Cr) in debt funding led by Kotak Mahindra Bank and RBL Bank with Alteria Capital.

Bengaluru-based B2B fintech startup Rupifi raised $8 Mn venture debt from Alteria Capital, Trifecta Capital and Innoven Capital, as reported on March 22, 2022.

Earlier today, debt financing non-banking finance company (NBFC) BlackSoil announced its investment of more than $4.5 Mn in three startups – Blu-Smart Mobility, BigHaat, and LoanTap. BlackSoil had also announced investing INR 20 Cr cumulatively in Loanzen Finance, SV CreditLine (SVCL), and CMS IT Services, in August 2021.

Note: The total debt amount quoted for Aye Finance above has been collected from primary research and secondary sources. We have approached the company for the same, and will be updating the story accordingly.