Aye finance is an Indian company founded by two bankers Sanjay Sharma and Vikram Jetley in March 2014. They have successfully transformed the way micro-enterprises were being financially empowered in India.
Lack of funds is one of the major reasons of why micro-enterprises fail to grow. Even the best programs introduced in the finance industry have failed for such micro-enterprises, as they don’t have the requisite knowledge or the financial records necessary, thus leading to rejection. Reasons for their rejection also includes not maintaining a good business record or credit history.
Aye finance has been able to improve this process with a new innovative method using data science. They classify all the micro-enterprises among four major categories which are Manufacturing, Trading, Services and Agriculture. Aye finance has developed a new method to judge an enterprise. As these micro-enterprises do not have official account books, the cash flow assessed is on the basis of the number of employees, number of machines, overall infrastructure and a rough estimate of their expenditure bills. This information goes through a variety of data science tools, based on which loans are approved and cleared directly to the customer’s account. Aye finance is a ‘non-banking’ financial services company and now has almost 72 branches across 10 states in India. It has disbursed more than $74 Million in funds to more than 60,000 micro-enterprises.
Funds raised by Aye Finance
The first seed round fundraising took place on Feb 23, 2015 and the money raised was $1 Million by venture firms like Action and SAIF Partners, followed by $3 million Series A fund raised in December later that year. Series B round was quite successful as the company managed to raise $10.5 Million.
Soon LGT Impact ventures joined them in the 3rd round of Equity raised. Now the Google’s Capital G which was earlier known as Google Capital invested in Aye Finance and it has helped raise about $21.5 Million.
About CapitalG & Why They Invested In Aye Finance
Google has been trying to include India in its investment plans since quite a while now. They have also been working on providing free Wi-Fi services at select locations across India. They have backed up a lot of Indian start-ups such as Practo, and GirnarSoft, owners of Cardekho.com and Gaadi.com.
Aye Finance Reaction On The Deal & Technologies They Are Using
The managing director of the company made a statement saying
“CapitalG’s access to Google expertise in scaling businesses using analytics and technology will strongly supplement our approach. We intend to cover the large unaddressed MSME finance market that other finance providers have found difficult to service”
Mr Kaushik Anand, the Head Capital G, India, said “Over the last few years, Aye has proven that their model is one of the most efficient ways to deliver credit to underserved MSMEs across industry clusters. We look forward to working with Aye and helping them use technology to address under-penetrated segments of the MSME credit market”