Aye Finance, an Indian startup that offers its digital lending platform to small businesses, has raised $37.18 million in a new round of funding led by British International Investment as it looks to continue helping micro-enterprises grow their businesses them and workers to expand their incomes.
The full Series F round, which does not include secondary transactions and brings Aye’s total fundraising to nearly $200 million, includes participation from Waterfield Fund of Funds and the startup’s existing investor A91 Partners. In 2020, the startup raised $27.5 million in Series E funding round led by Alphabet’s CapitalG.
Founded in 2014, Always — means “Yes” in English and “Income” in Hindi — provides business loans in the form of home loan, mortgage and term credit to underserved micro-enterprises who find it difficult to secure their working capital requirements from traditional lenders, including of banks, with an average ticket size of $1,800. The startup uses a combination of in-house technology and analytics to offer a range of financial solutions to businesses based on their needs.
To date, the 10-year-old company has touted having disbursed more than $959 million in credit to more than 700,000 unorganized businesses. It competes with companies such as Capital Float, Lendingkart and Indifi, all of which work to provide credit to small businesses in the South Asian nation.
Aye told TechCrunch that its revenue rose 45% to $77.10 million in fiscal 2023 from $53.12 million the previous year. Additionally, it plans to go public in fiscal year 2026.
A key reason for startups like Aye and others gaining traction in India is the lack of credit for small businesses.
India is home to over 63 million micro, small and medium enterprises, which contribute to nearly 30% of the country’s gross domestic product as well as over 43% of total exports and employ over 123 million people, according to government figures. The government is indeed looking at the importance of these businesses in the overall development of the country and has introduced a number of initiatives to ease their credit requirements. However, many small businesses still struggle to find capital to start and sustain their operations, as some eligibility requirements of some government schemes and programs do not match their business models or scale, and some involve time-consuming processes. Startups like Aye are taking advantage of this gap by offering credit through their platforms.
“We believe there is tremendous potential for lending to underserved micro-enterprises and the fresh capital will give a strong boost to our complex story,” Sanjay Sharma, co-founder, MD and CEO of Aye Finance, said in a prepared statement.
“Aye Finance is on a growth journey and we are delighted to partner with BII who has a deep understanding of the financial services sector in India. This equity raise is testament to the strong belief investors have in a high-quality franchise like Aye.”
The Gurugram-based startup, which has a presence in 22 states through its 395 offices, says it has more than $959 million in assets under management and posted over $9.59 million in profit after tax in its first six months. fiscal year 2024.
“Our investment in Aye Finance underscores our commitment to support companies that have a strong ethos of developmental impact and advance financial inclusion for India’s underserved groups. The Aye team stands out for its dedication and experience in delivering technology-enabled financing solutions with high scalability potential,” said Gaurav Malhotra, Director of Financial Services, British International Investment.
