Introduction:

In a significant financial boost, micro-lending platform Aye Finance has successfully raised INR 310 crores (approximately $37 million) in its Series F funding round. The round was spearheaded by British International Investment, with additional participation from Waterfield Fund and A91 Partners, an existing company backer. This marks a notable development for Aye Finance, breaking a funding hiatus over three years.

Funding Landscape:

With this latest funding injection, Aye Finance has accumulated around $200 million across various funding rounds. The company’s previous funding milestone was a Series E round that raised INR 210 crores ($27.5 million), led by CapitalG, Google’s venture capital fund. Notably, this round comes after the firm’s valuation of approximately $250 million in the Series E round in June 2020.

Investor Confidence:

British International Investment’s leading role in the Series F funding round underscores international investors’ growing confidence in India’s micro-lending landscape. The infusion of funds from Waterfield Fund and the continued support from A91 Partners further emphasize Aye Finance’s strategic positioning in the financial services sector.

Business Operations and Services:

Aye Finance operates from its Gurugram base and boasts a network of over 398 branches across 22 states in India. The company primarily caters to micro and small businesses, particularly manufacturing, trading, and service sectors. Aye Finance offers three distinct products—quasi-mortgage loans, hypothetical loans, and add-on loans—with loan amounts ranging from INR 50,000 to INR 1,000,000. These financial products target micro and small enterprises with annual business turnovers between INR 10 lakh and INR 1 crore.

Financial Milestones:

With a decade-long presence in the market, Aye Finance proudly reports disbursing over INR 7,600 crores in credit to more than 576,000 businesses, achieving an impressive 60% repetition rate. The company’s notable turnaround in the last fiscal year saw it achieve profitability and robust growth. During FY23, Aye Finance reported a 44.5% increase in revenue from operations, reaching INR 623 crores. In a remarkable reversal, the company recorded a substantial profit of INR 54 crores, compared to a loss of INR 46 crores in the previous fiscal year (FY22).

Market Competition:

Aye Finance faces competition from several non-banking financial companies (NBFCs) in the micro-lending sector. Key competitors include Indifi, reporting INR 198 crores in revenue with a profit of INR 5 crores in FY23, and Axio (formerly Capital Float), registering INR 219 crores in revenue but with a loss of INR 137 crores during the same period. Other contenders in the market include Lendingkart, Flexiloans, and various emerging players.

Conclusion:

Aye Finance’s successful Series F funding round, led by British International Investment, not only highlights the company’s financial resilience but also signals a positive trajectory for the micro-lending sector in India. With a strong foothold in the market and a commitment to supporting micro and small enterprises, Aye Finance is poised for further growth and impact in the evolving financial services landscape.