Varthana Pockets INR 27 Cr To Boost Its Education Financing Offerings 

Education-focussed non-banking financial company (NBFC) Varthana has raised a funding of INR 27 Cr (around $3.2 Mn) from Netherlands-based impact investment fund Triodos Investment Management via non-convertible debentures.

According to the company, the funding provided through Triodos Fair Share Fund will enable Varthana to expand its financial services to more students and schools in upgrading their infrastructure, facilities and educational foundations.

“The funding provided to Varthana reflects a shared vision of driving positive social impact and the importance of innovative financing solutions in addressing the challenges faced by the education sector,” said Steve Hardgrave, co-founder and chief executive officer of Varthana.

Founded in 2013 by Brajesh Mishra and Steve Hardgrave, Varthana is an NBFC offering low-cost, collateral-free loans with customised EMI options to private schools and students. 

Under its student loan offering it offers loans up to 5 Lakh for degree and PG courses, two-year pre-university college degrees, certification courses and skill enhancement courses. 

With a presence in 16 states and union territories and 40 branches, Varthana claims to have financed over 11,000 private schools and has provided over 16,500 loans till date. 

Dorian Marquer, Head of Corporate Debt Asia/ECCA Triodos Investment Management, said, “This investment shows that financial inclusion also plays a role in addressing other pressing issues, such as access to affordable quality education, which is seen as a key pillar to alleviating poverty. Education is an empowering force in the world and Varthana plays a very important role in equipping children across India with the qualities and skills to shape and build their future.”

Triodos Investment Management is a wholly-owned subsidiary of Triodos Bank NV which operates globally. It has assets under management of 5.7 Bn Euro by 2023. 

The company counts the likes of Blue Earth Capital, BlueOrchard Finance, ChrysCapital, Kaizenvest, Elevar Equity, LGT Impact, and Omidyar Network India among its investors. 

For the financial year FY22, the company registered a revenue of INR 191 Cr and a profit of INR 3 Cr. 

In March, Varthana acquired Indian School Finance Company’s school loan portfolio for INR 126 Cr, adding oversee term loans of 10,000 schools across 14 states to its portfolio. 

The company has raised multiple funds lately which include raising a debt funding of $10 Mn (around INR 83.4 Cr) from impact investor BlueOrchard Finance and $14 Mn (around INR 116 Cr) from its existing investor Blue Earth Capital earlier this year. 

In September last year, it secured a debt funding of $2.5 Mn from Symbiotics Investments via education-focused social bonds. It also raised $7 Mn funding in January 2023 from MicroVest to scale up credit facilities for low-budget private schools. 

This development comes close to other NBFCs around the education category gaining interest from investors. 

For instance, recently, education-focused fintech startup Propelld got a debt fund worth $25 Mn (about INR 208 Cr) for its non-banking financial company (NBFC) Edgro Finance. 

As per Inc42, the broader Indian digital lending market is expected to cross the $1.3 Tn mark by 2030.