Aye Finance Exit for Early Investor Follows Impact on 2 Lakh Indian Entrepreneurs

Aye Finance, India’s leading fintech lender to India’s 60 million micro enterprises, announced that Accion, a global non-profit and one of its earliest investors, has sold its stake in Aye to A91 Partners, an Indian investment firm that raised its first fund in 2019 to help finance and build the next generation of enduring Indian companies.

Aye Finance was founded in 2014 to address the credit challenges of the unbanked micro enterprises of India and to power their growth into new age India. Right since inception Aye has found support from marquee investors who have supported it in its mission of transforming micro enterprise lending in India. Accion first participated in Aye’s seed equity round in early 2015 along with SAIF Partners and seeing the tremendous potential in Aye’s innovative credit assessment models, provided additional capital in the two subsequent equity rounds as well. In the early years Accion also partnered with Aye on various advisory projects across risk and analytical verticals.

Commenting on the development Sanjay Sharma, Founder and Managing Director, Aye Finance, said “The teams at Aye have been relentlessly working to bring this ignored sector into the folds of organized lending and we recently reached the milestone figure of two hundred thousand loans disbursed. Accion has been a supportive partner in our transition from a startup to a mid-size organization. We are grateful for their initial capital and advisory support in the last 5 years. A91 Partners are a quality investor team and our growth trajectory will get strengthened with their India focus. The deal was led by Kaushik Anand of A91, who was earlier on our board as Nominee Director of CapitalG. This investment from A91 is a clear reaffirmation of the confidence of our investors in our team and our business model.”

Kaushik Anand, Partner, A91 Partners said” Over the last 2 years, Aye has grown from Rs. 500 cr to over Rs.1500 cr of AUM using technology as a backbone to scale the business. Under Sanjay’s leadership, the Aye Finance team has built a sustainable and profitable business while helping thousands of microenterprises with access to formal credit. We look forward to partnering with Sanjay and team in their journey to build an enduring franchise.”

Michael Schlein, President and CEO of Accion said “Aye Finance provides much-needed financial services to India’s small and medium-sized informal businesses and the entrepreneurs who run them – a critical, but often overlooked and underserved, population. This is why Accion began supporting Aye at its earliest stages with capital and advisory services. We are proud to exit five years later knowing that Aye has reached more than two hundred thousand customers and is on a clear trajectory to continue growing and advancing financial inclusion,”

Abhishek Agrawal, Accion’s Chief Regional Officer for South Asia said “We are pleased to have played a role in Aye’s success reaching thousands of Indian entrepreneurs through a unique MSME cluster based approach, and are confident that A91 is the right partner to support the company’s continued growth and expansion,”.

Having established an innovative paradigm in micro enterprise lending in India through its “Cluster Based Credit Assessment” methodology, Aye has now developed various Artificial Intelligence / Machine Learning models to extend credit to a much larger population of micro enterprises, establish a tighter control on its asset book quality along with bringing improved efficiencies in its processes.

Accion’s support of Aye Finance has spanned nearly five years and included numerous rounds of capital, representation on the company’s board of directors, and the provision of extensive advisory services. Accion first invested in Aye through its seed-stage inclusive fintech investment initiative Accion Venture Lab in early 2015, co-leading Aye’s first institutional investment round when it had just begun lending operations. After Aye demonstrated success at its early stages, Accion provided further capital through its later-stage investment initiative Accion Global Investments and services through Accion Global Advisory Solutions to help the company continue to scale. Recently, Accion’s advisory team worked with Aye on the design of a mobile app that allows its customers to digitally record sales and purchase transactions, which in turn can help Aye improve its lending decisions. 5 years after Venture Lab’s initial investment, Aye now serves over one hundred forty thousand micro enterprises and has loaned $410 million to MSMEs that would otherwise be left out of the formal financial system.

Note to reporters: Accion Venture Lab exited its investment in Aye Finance in 2018. This announcement marks Accion’s final exit through its Accion Global Investment initiative.

About Accion

Accion is a global nonprofit committed to creating a financially inclusive world, with a pioneering legacy in microfinance and fintech impact investing. We catalyze financial service providers to deliver high-quality, affordable solutions at scale for the three billion people who are left out of — or poorly served by — the financial sector. For more than 50 years, Accion has helped tens of millions of people through our work with more than 110 partners in 50 countries. More at http://www.accion.org.

About A91 Partners

A91 Partners is an investment firm focused on early growth investments in consumer, financial services, technology and healthcare sectors in India. We look to partner with entrepreneurs looking to build enduring businesses for tomorrow’s India. The first fund of $351M was raised in 2019 and the current portfolio includes Sugar Cosmetics, Hector Beverages and Atomberg Technologies. More at https://www.a91partners.com/

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