Online Lending Startup Aye Finance Picks Up $4.6 Mn Funding From BlueOrchard

Gurugram-headquartered online lending startup Aye Finance has raised $4.6 Mn (INR 30 Cr) in debt funding led by Swiss impact investor BlueOrchard Finance Ltd. The development comes less than two months after that startup secured $3.8 Mn (INR 25 Cr) from three investors, including Hinduja Leyland Finance and IntelleGrow.

As per the media statement, the latest round of funding will enable Aye Finance to further diversify its lending portfolio, with the aim of reaching out to more MSMEs in India.

Commenting on the fundraise, Sanjay Sharma, Managing Director and Founder of Aye Finance, said “It is humbling to see the amount of trust BlueOrchard has shown in Aye Finance. While we are thankful for their timely support and encouragement through the investment of funds, it also inspires us to continue the work we are doing in creating a difference in the Indian economy by supporting the MSME sector.”

Aye Finance Growth Story: A Snapshot

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

It has a proprietary data-driven underwriting technique called “Cluster Based Credit Assessment”, which ensures robust credit selection in the absence of good financials or banking records and without prior credit bureau history.  

The online lending startup’s customised appraisal techniques for each industry and cluster helps it serve customers outside the purview of traditional financing. Currently, Aye Finance boasts over 72 branches across 10 states, with a workforce of more than 1000 employees.

From disbursing 4,000 loans in FY15-16 and 13,000 loans in FY16-17, the company has grown substantially, touching 40,000 loans in FY17-18. Till date, Aye Finance claims to have disbursed over $77.4 Mn (INR 500 Cr) credit to underbanked small businesses. Furthermore, it boasts more than 54.2 Mn (INR 350 Cr) in assets under management (AUM).

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

Earlier, in May 2017, it raised $8 Mn from global impact investment manager BlueOrchard. 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.

About BlueOrchard Finance

Headquartered in Switzerland, BlueOrchard Finance is a global impact investment manager. The firm is dedicated to fostering inclusive and climate-smart growth, while providing attractive returns for investors.

BlueOrchard was founded in 2001, by an initiative of the UN. Today, BlueOrchard provides investors across the globe with a variety of investment solutions, including credit, private equity, and sustainable infrastructure, as well as debt and equity financing to institutions in emerging and frontier markets.

So far, BlueOrchard has invested more than $4.7 Bn across 70 emerging markets. As stated by Sharma, the cooperation between Aye Finance and BlueOrchard began in May 2017. Since then, the firm has invested more than $15.3 Mn (INR 100 Cr) in the online lending startup.

In the SME lending segment, Aye Finance competes against a number of players such as Chennai-based fintech startup Veritas Finance, Lendingkart, Capital Float, Quikrupee, SMEcorner, Innoviti, Biz2credit, FlexiLoans, and KredX, among others