Bucking the coronavirus-driven economic downturn, Indian FinTech Aye Finance on Wednesday (June 24) said it had raised $27.5 million from a group of investors led by the private equity arm of Alphabet, Google’s corporate parent.
The Gurgaon-based startup, which has built a digital lending platform for small businesses, took to Twitter to announce the news of the cash infusion by Alphabet’s CapitalG, as well as current investors A91 Partners, MAJ Invest, LGT Lightstone and Falcon Edge Capital, who also chipped in.
The startup has raised $91 million over its six years in business and is now valued at over $250 million, according to a report in the The Economic Times citing a regulatory filing.
“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,” Sanjay Sharma, managing director at Aye Finance, told the Mumbai-based newspaper.
The injection of capital comes as Aye Finance prepares to resume lending in July to small businesses. Like many Indian companies, Aye was forced to shut operations in March amid a nationwide lockdown aimed at preventing the spread of COVID-19.
Aye’s focus is on truly small businesses that have yet to be formally organized, determining credit worthiness with predictive analytics and statistical models. To date, the company has said it has helped 200,000 small businesses work through the lending pipeline.
Late last year, Aye Finance announced it had raised $14 million from Blue Orchid. That followed a $16.8 million funding deal just a few weeks earlier with FMO, a Dutch development bank, as well as $8 million in debt funding last August from DCB Bank.
“Lending to micro-enterprises has been a less-traveled path for banks and financial companies and hence it is satisfying to have established an innovative paradigm of our lending approach,” Sharma said at the time. “Aye’s team has demonstrated the robustness of our cluster-based lending approach has enabled the inclusion of close to 200,000 micro-enterprises using this approach.”