Education-focussed non-banking finance company Auxilo Finserve Pvt. Ltd has raised Rs 470 crore (around $57.4 million) as a primary equity capital in its recent funding round.
The round was led by Tata Capital Growth Fund II, Trifecta Leaders Fund - I and Xponentia Opportunities Fund - II. Xponentia has committed to invest Rs 110 crore in the company.
Existing investor ICICI Bank Limited also participated in the funding mop-up. The lender had invested Rs 51 crore in the education financing company in November 2020. Prior to this, the company had raised Rs 37.5 crore from Balrampur Chini Mills in 2018.
The transaction closure is subject to necessary regulatory approvals.
“Auxilo plans to use the capital to fuel its growth aspirations by expanding its loan base, broadening its product offerings, and providing innovative financial solutions to its customers,” said Neeraj Saxena, managing director and chief executive of Auxilo Finserve.
The company will also use capital infusion to broaden its product offerings and enhance its technological capabilities.
Saxena added that the investors' keen interest in the education finance market, which is a highly specialized and niche industry segment, reaffirms the sector's attractiveness and the market's confidence in its potential, business model, and growth trajectory.
Founded in 2017, Auxilo Finserve provides loans to students for pursuing education in India or overseas. The company also provides financing to educational institutions so that they can improve their infrastructure and meet working capital needs.
The company claims that it has provided loans to more than 7500 students across more than 900 universities in over 25 countries. On the other hand, the company has provided finance to over 150 educational institutions. It operates out of seven key cities in India, with an employee strength of over 250 employees.
The company claims that its assets under management (AUM) grew at 51% CAGR (compound annual growth rate) during FY20-23 and stand at Rs 1,691 crore as of 31 March.
In the education loan space, the company pits against the likes of HDFC Credilam Eduvanz, Propelld, Leap Finance, and Gyandhan, among others.
Investec India was the exclusive financial advisor for this transaction while vendor due diligence was performed by Alvarez & Marsal. On the other hand, Trilegal, which was also the exclusive legal advisor of the company, performed the legal due diligence for the transaction.
