Home / Business / CapitalG leads $21.5M investment in Aye Finance, its first fintech deal in India

CapitalG leads $21.5M investment in Aye Finance, its first fintech deal in India

India is a major part of Google’s global focus. The company launched a new product in India last week as its program to bring free WiFi to the public registered its 400th railway station. Now, the U.S. tech giant is continuing to deepen its focus after CapitalG — its venture arm formerly known as Google Capital — made its first fintech investment in India by backing micro-loan startup Aye Finance.

CapitalG led the $21.5 million Series C round which also included participation from existing investors SAIF Partners and LGT, who were part of a $10.5 million investment in 2016. Since that round, Aye Finance has raised over $30 million via a series of debt investment-based deals, according to data from Crunchbase.

Update: The original version of this story stated that the deal is CapitalG’s first in India, but the firm has already backed a number of startups in the country including FreshDesks, Practo, Cardekho, and Cuemath. The Aye Finance deal is, however, the first investment in an Indian fintech startup — we have since corrected the story and apologize for any confusion.

Aye Finance offers micro-loans to small businesses in India that are not on the radar of banks and traditional financing companies, and also don’t qualify for programs run by the likes of Flipkart and Amazon. The firm aims to digitize the market of informal money lending and loan sharking. Its disbursements are typically used as working capital for SMEs.

Over its four years of operations, the startup claims it has paid out more than 60,000 loans. Today, it claims to cover 10 states in India through a network of 72 branches. The firm touts its use of technology, and in particular data, which helps keep operating costs low and efficiency high.

In particular, it targets industry ‘clusters’ — aka industry verticals — which allows it not only to develop more accurate metrics for analyzing the potential of a business than the general criteria that traditional financiers follow, but it also helps generate new leads through word of mouth.

Aye Finance raises $10.3M to supply micro-loans to small companies in India

“We have used insightful data models and technology to provide affordable business loans to the financially excluded micro enterprises across India [and] CapitalG’s access to Google expertise in scaling businesses using analytics and technology will strongly supplement our approach. We are at an exciting juncture, where the business model has been proven and is also scaling well,” Sanjay Sharma, Aye Finance founder and managing director, said in a statement.

Google’s previously made its first direct investment in an Indian startup when it backed Dunzo, a startup that operates a concierge app, in December 2017. Now CapitalG is catching up with its first deal on Indian soil.

Check Also

Alphabet invests $375 million in Oscar Health

Google parent Alphabet has invested $375 million in next-gen health insurance company, Oscar Health. Google has been a longtime supporter of the six-year-old New York company, having previously invested in Oscar through its Capital G investment wing and Verily health and life sciences research wing. “Alphabet has invested in Oscar over many years and has seen the company and its team up close. We’re thrilled to invest further to help Oscar in its next phase of growth,” an Alphabet spokesperson told TechCrunch. That $165 million round raised back in March valued the health startup at around $3 billion. The new round maintains a similar valuation, while giving Alphabet a 10 percent share in Oscar. The deal also has longtime Google employee and former CEO Salar Kamangar joining Oscar’s board. Oscar co-founder and CEO Mario Schlosser announced the news in an interview with Wired, telling the site, “We can hire more engineers, we can hire more data scientists, more product designers, more smart clinicians who can think about health care a different way. It’s the acceleration of that product roadmap that fascinates us the most. The second, more tangible piece, is that we’re launching new product lines.” Part of that product expansion includes getting into Medicare Advantage in 2020, which is a deviation from the current offerings in the individual and employer insurance markets. Oscar started out by offering insurance for individuals, growing rapidly during the launch of the Affordable Care Act and then rolling into small business offerings with its product Oscar for Business. Medicare represents a new vertical for the company, adding to its existing focus on both the individual and employer insurance markets. “Oscar will accelerate the pursuit of its mission: to make our health care system work for consumers,” Schlosser said in a statement provided to TechCrunch. “We will continue to build a member experience that lowers costs and improves care, and to bring Oscar to more people — deepening our expansion into the individual and small business markets while entering a new business segment, Medicare Advantage, in 2020.”

Leave a Reply

Your email address will not be published. Required fields are marked *

Disclaimer: Trading in bitcoins or other digital currencies carries a high level of risk and can result in the total loss of the invested capital. theonlinetech.org does not provide investment advice, but only reflects its own opinion. Please ensure that if you trade or invest in bitcoins or other digital currencies (for example, investing in cloud mining services) you fully understand the risks involved! Please also note that some external links are affiliate links.