India's Suryoday Micro Finance raises $15m, Aavishkaar exits
Indian micro-finance institution (MFI) and non-banking finance company (NBFC) Suryoday Micro Finance has raised INR1 billion ($15 million) in fresh capital, with Aavishkaar Goodwell fully exiting the company in a separate transaction.
A number of investors participated in the new funding round, including IDFC Bank, Arpwood Investment Advisors, Gaja Capital and Evolvence India Fund. Lok Capital also made a partial exit. According to a release, the total capital involved in the deals was INR2.2 billion, indicating that the exiting firms received INR1.2 billion in all.
Suryoday, based in Mumbai, is registered with the Reserve Bank of India (RBI) as an NBFC-MFI, and also received in-principle approval last October for a small finance bank (SFB) license, along with several other VC and PE-backed MFIs such as Equitas Holdings, Au Financiers and Janalakshmi. The new license is meant to help provide financial services to India's large unbanked population and allow them to enter the formal banking system. Suryoday's latest round of funding is intended to support its transition to providing SFB services, according to a separate release by Aavishkaar.
Aavishkaar has been an investor in Suryoday since 2009, when it committed $900,000 to the company; Lok came in alongside Aavishkaar for the next round in 2010, with the two firms investing INR175 million in all. The International Finance Corporation (IFC), the investment arm of the World Bank, is another backer of Suryoday, having invested $2.8 million in 2013 along with $6 million in loan financing. Lok and Aavishkar joined that round as well when it closed in 2014.
"Our association with Aavishkaar Goodwell began even before we started the company and has been mutually rewarding," said Suryoday's co-founder and CEO R. Baskar Babu. "We thank Vineet Rai and the Aavishkaar Goodwell team for their trust in us and appreciate their role in helping us evolve into a respectable player in financial inclusion."
Aavishkaar Goodwell is a joint venture between Indian VC firm Aavishkaar Venture Management Services and Netherlands-based Goodwell Microfinance Development Company, focused on investments in Indian microfinance businesses and related initiatives. It closed its second fund in 2013 with $80 million, including a $15 million commitment by IFC.
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