Alphabet-backed Aye Finance bags ₹310-cr Series F funding led by British International Investment

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Aye Finance, a non-banking finance company, has entered into definitive agreements for raising ₹310 crore in a Series F funding round led by the UK’s development finance institution and impact investor British International Investment (BII). 

The Waterfield Fund of Funds and Aye’s existing shareholder A91 Partners also participated in this round. 

Sanjay Sharma, co-founder, MD and CEO of Aye Finance, said, “Aye Finance is on a growth journey and we are delighted to partner with BII, who have a deep understanding of the financial services sector in India. This equity raise is a testament to the strong conviction that investors have in a high-quality franchise such as Aye.”

He said there is immense potential in lending to underserved micro-enterprises, and the fresh capital will provide a strong fillip to Aye’s compounding story.

The Capital G (Google parent Alphabet’s investment arm)-backed fintech, which was launched in 2014, has so far raised ₹1,000 crore of equity.

Gaurav Malhotra, Director for Financial Services, BII, said, “Our investment in Aye Finance underscores our commitment to back companies that have a strong development impact philosophy and promote financial inclusion for India’s underserved groups. The team from Aye stands out for its dedication and experience in offering tech-enabled financing solutions with high potential for scalability.”

Malhotra said that while there are over 64 million micro, small and medium enterprises (MSMEs) in India, only 11 per cent of micro-enterprises have access to formal credit. “Therefore, I am thrilled that, through partnering with Aye, we are not only helping to bridge this gap but also enabling micro entrepreneurs and their employees to grow their businesses and incomes,” he said.

Aye has disbursed ₹8,000 crore to the small business segment since inception, bringing over 700,000 unorganised businesses into the formal lending ecosystem.

Aye Finance has over ₹3,600 crore of asset under management and has recorded profit after tax of ₹80 crore in the first six months of fiscal 2023-24.

Avendus Capital was the exclusive financial advisor to Aye Finance for the Series F fund-raising transaction.