Aye Finance, India’s leading lender to the MSME Sector, announces INR 210 Crores in Series E funding, led by CapitalG, Alphabet’s independent growth fund. The round also includes participation from Aye’s existing investors LGT Lightstone, Falcon Edge Capital, A91 Partners and MAJ Invest. With this fresh investment, Aye’s total equity funding since inception exceeds INR 690 crores.

This funding recognizes the traction Aye Finance is seeing in the market as a disruptive microenterprise lender. Since its inception in 2014, Aye has disbursed INR 3000 crores transforming the micro-enterprise lending landscape and brought over two hundred thousand unorganized businesses into the formal lending ecosystem. The fintech lender deploys advanced statistical models and predictive analytics to make robust risk selection that works even in the absence of formal business documents and prior credit histories. Despite the disruptions brought on by the onset of COVID-19 that adversely affected the MSME sector, Aye has shown improving operating ratios in the first quarter of FY20-21, on the back of its quality lending book.

Commenting on the latest fundraise, Sanjay Sharma, Managing Director, Aye Finance said, “Closing major funding round during these times of economic uncertainty reinforces the value that our investors see in Aye Finance.  Difficult times are a true test of a good lender and we have already started showing significant improvements in the customer repayments in the past months. Our loans are underwritten with cluster insights and this continues to assure good repayment behaviour in our portfolio. Our deep connection with customers, our engaged team that rates us as a great place to work, our extensive presence on the field, supported with automation, is a huge differentiator that enables us to optimally restrict credit losses. This equity investment will further add to liquidity that will enable us to emerge strongly from the COVID crisis and continue to benefit millions of micro-enterprises across India.”

"Aye Finance's continued success is a testament to their industry leadership, their underwriting methodology, which combines an optimal mix of data science with a physical presence in the field, and their ability to empower a huge, unaddressed market,” said Sumiran Das, Board member and Partner at CapitalG."We are proud to support Sanjay Sharma and Aye Finance in their mission to expand access to credit to SMEs across India."

Kartik Srivatsa, Managing Partner of LGT Lightstone Aspada said,“We first invested in Aye in 2016 and over the years we have seen them grow into a canonical institution with a strong focus on impact and scalability. The relevance of Aye in the post-COVID economy in serving the financing needs of micro-businesses is significant and we are excited to invest further in the growth journey of Aye.”

Navroz D. Udwadia, Co-Founder, Partner at Falcon Edge Capital said, “We focused on MSME and SME lending as a significant yet under-served financing opportunity with healthy unit economics and a large, fragmented addressable market. We are excited to continue to back Aye Finance on this next leg of growth as they bring credit to India’s under-served MSMEs via a thoughtful and risk-adjusted cluster-based approach.”

Kaushik Anand, Partner at A91 Partners commented, “We are delighted to increase our investment in Aye Finance. The company's leadership has responded robustly to the challenges COVID has presented. What Aye Finance provides has never been more important to India's micro-enterprises and we are glad to hear customers echo that sentiment.” 

David Paradiso, Partner at Maj Invest, commented: “We are excited to continue our support of Aye Finance and its management team. We are happy to contribute to the scaling up of the business to continue providing top quality products to our customers”