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Ujjivan Raises $25.2 Million Equity Funding
By siliconindia
127.9 crore ($25.5 million) in its fifth round of equity funding. Two new foreign institutional investors FMO (Netherlands Development Finance Company) and WCP Mauritius Holdings III (Wolfensohn Capital Partners) and existing investors participated in this round. With this round of equity funding, the last being in 2009, Ujjivan's capitalisation has more than doubled to 230 crore. Kotak Investment Banking was the advisor and arranger of the transaction.
The existing investors who participated in the current round of funding are Lok Capital who invested 10 crore; Sequoia Capital, 10 crore; Mauritius Unitus Corporation, 2.5 crore, Elevar Equity, 12.5 crore, and India Financial Inclusion Fund (Caspian Advisors), 20crore. FMO invested 32.6 crore and WCP Mauritius Holdings III invested 40 crore in the company.
Samit Ghosh, Managing Director, Ujjivan, said, "We thank our existing investors who continue to reiterate their commitment to us and welcome our two new investors. This round of equity funding will make us one of the best capitalized MFIs in the country."
Ghosh founded Ujjivan in 2005. He has been in international banking for over thirty years. He pioneered consumer banking in India with Ravindra Bahl and Jaitirth Rao at Citibank in 1985. He is an alumnus of Jadavpur University and Wharton School.
The fund will help Ujjivan in the development of their business. The firm is focused on helping urban and semi-urban poor women right across India. It serves over a million clients in 20 states including 49 under-banked districts across the country and does not have a presence in Andhra Pradesh. "We have presence in 20 states across India. In 2007, the Micro Finance market in Andhra Pradesh was over crowded and the sector lacked good relationship with the government too. This is why we opted not to have presence in the state, which proved to be good for us as we were not affected by the Micro Finance crisis in the state," adds Gosh.
FMO is the Dutch development bank. It supports sustainable private sector growth in developing and emerging markets by investing in ambitious entrepreneurs. With an investment portfolio of EUR 5 billion, FMO is one of the largest European bilateral private sector development bank.
Keesjan de Kruijf, Senior Investment Officer, FMO, says, "We are happy to work with Ujjivan, which is constantly searching for ways to better serve the urban poor. The firm focuses on their mission to alleviate poverty and strong business credentials make the company a very interesting partner for us."
Wolfensohn Capital Partners is a private investment fund specializing in growth equity investments in emerging markets. The current investment is made by WCP Holdings III, an affiliate of Wolfensohn Capital Partners. Sanjiv Kapur, Managing Director, Wolfsensohn India Advisors, says, "This is the first investment for us in the Indian microfinance sector, endorsing our faith in the sector and in Ujjivan's financial inclusion model."
