Vistaar Livelihood Finance (Vistaar LFI), a Bangalore-based microfinance entity offering finance to women entrepreneurs, has raised Rs 15 crore in equity from Elevar Equity Advisors Pvt Ltd and SVB India Capital Partners.
With this, Sandeep Farias, founder & managing partner, Elevar Equity, and Ash Lilani, MD, SVB India Capital Partners, will join Vistaar LFI board.
Vistaar LFI is promoted by Brahmanand Hegde and Ramakrishna Nishtala, two first generation entrepreneurs. The company plans to utilise the fund to provide customised finance facilities to women entrepreneurs engaged in non-farm micro and small enterprises, apart from utilizing in opening branches, developing technology front and hiring people for running the business.
Without divulging details on the quantum of stake the company has diluted, Brahmanand Hegde, founder & CEO, Vistaar LFI, told VCCircle that the funds are picking up a substantial minority in the company with this deal.
Vistaar LFI is an NBFC and a for-profit company. It has positioned itself as a provider of livelihoods finance, and plans to target segment beyond the traditional microfinance customers, at the bottom of the economic pyramid. It aims to cater to the missing middle segment, which is between the individual loan customers and the traditional microfinance customers, Hegde said.
The company was launched a month-and-a-half back, and targets 300-350 branches serving 1.2 million customers in the next four years, eying a pan-India operation. The ticket size for its loans ranges from Rs 10,000 to Rs 25,000.
Vistaar LFI expects to start its operation soon, and for the next one year, it will focus on expansion, and subsequently look at monetization. Once it starts functioning, it will tie up with other financial lenders, including banks, for funds. Vistaar LFI is also looking for the next round of equity raising in the next 12-15 months.
“Our goal is to understand and address the needs of micro and small entrepreneurs and offer financial products that help our customers grow their enterprises,” Hegde, said in a statement.
Farias, of Elevar Equity, said, “Micro and small enterprises are the engines of economic growth and social impact at the base of the economic pyramid. Providing livelihood finance to this sector will enhance the productivity of these enterprises, increase incomes of families and empower local communities.”
Elevar Equity is a leading growth equity investor. It focuses investments in India, Latin America and South East Asia. It is based in Bangalore, and has offices in Seattle and the Bay Area. SVB India Capital Partners, on the other hand, is a stage and sector independent India-focused venture fund, and is investing in high growth potential businesses. Some of its earlier investments in India include SKS Microfinance, Genesis Colors, Geodesic Techniques Pvt Ltd, Sula Vineyards, One97 Communications, People Interactive and iYogi.
Private equity investment is gaining momentum in the microfinance space. Since January this year, 10 deals have already been inked with a total deal value of $91.48 million, according to VCCEdge, the financial research platform of VCCircle. Among the top deals, Bhartiya Samruddhi Finance Ltd raised $26.33 million from various investors including Lok Capital and Matrix Partners while Equitas Micro Finance raised $24 million from Aria Investment Partners. In 2009, about 16 deals were signed in the MFI space.