Aye Finance raises USD 37.18 million

Providing its digital lending platform to small and medium-sized enterprises (SMEs), Aye Finance intends to continue to support micro businesses in expanding their operations and employees in increasing their incomes. In addition to British International Investment, the all-equity Series F round involved the participation of Waterfield Fund of Funds and the company’s pre-existing investor A91 Partners. The financing is not the first one for Aye Finance, as previously the company was supported by Alphabet’s CapitalG, SAIF Partners, and Accion, among others. As per the information detailed in the press release, the most recent fundraising brings Aye Finance’s total amount to approximately USD 200 million.

With its operations started in 2014, Aye Finance offers business loans in the form of mortgage, hypothecation, and term credit to underserved micro businesses that face difficulties when trying to obtain their working capital requirements from traditional lenders, such as banks, with an average ticket size of USD 1,800. The company merges its in-house technology with analytics to provide a suite of financial solutions to businesses based on their requirements, needs, and demands. In a statement offered to TechCrunch, Aye Finance shared that its revenue expanded by 45% to USD 77.10 million in 2023 from USD 53.12 million in 2022. Furthermore, the company mentioned that it intends to go public in the financial year 2026.

Moreover, representatives from Aye Finance highlighted that there is currently significant potential in lending to underserved micro-enterprises, and, with the additional capital, the company aims to support its growth strategy. Considering its plans, the company expressed its enthusiasm towards partnering with British International Investment as the latter has a deep insight into the financial services sector in India. Officials from British International Investment stated that the investment in Aye Finance aligns with the company’s commitment to supporting enterprises that can have a substantial development impact and that promote financial inclusion for Indian underserved groups. The decision to invest in Aye Finance was also based on the company’s experience in providing tech-enabled financing solutions with the potential for scalability.

Assisted by the government, with access to capital, skilled workers, and a supportive business environment, India currently has the third largest startup sector at a global level, with the country being projected to see a consistent annual growth of 12% to 15%. Initially a software-intensive hub, the country expanded across industries, with the focal startup hub now being in Bangalore, followed by Delhi, Mumbai, and Chennai. As per Statista’s report, ecommerce, enterprise tech, and fintech attracted the highest number of funding deals in 2022.

The COVID-19 pandemic negatively impacted India’s startup landscape, with many companies affirming a decrease in revenues, as well as permanent or temporary closure, despite collaborative public and private support. However, in 2021, the country saw a return in growth, with India recording a substantial number of unicorn businesses. Additional factors, including the Russia-Ukraine war, contributed to the fluctuations in the startup ecosystem, as the funding value decreased and there was a fall in the deployment of new startups in comparison to 2021.

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