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Avanse Financial Secures INR 1,000 Crore to Bolster Education Financing

Avanse Financial Services, a leading education-focused non-banking financial company (NBFC), has secured INR 1,000 crore ($120 million) in primary capital. This funding round was led by Abu Dhabi-based investment firm Mubadala Investment Company, with participation from Avendus PE Investment Advisors Private Limited through its Avendus Future Leaders Fund II.


This development follows a previous report from a month ago, which indicated that Avanse was in the process of raising capital from Mubadala, Kotak Pre-IPO Opportunities Fund, and Avendus Future Leaders Fund. The earlier report estimated the funding amount to be around INR 1,100 crore.


Founded in 2012, Avanse offers education financing solutions to students and educational institutions across India. Their portfolio caters to domestic and international higher education needs, along with skill enhancement loans. As of December 2023, the company boasts an impressive asset under management (AUM) of INR 12,147 crore.


Commenting on the fundraising, Avanse Financial Services' MD and CEO, Amit Gainda, highlighted the significance of the new capital. "This growth capital will equip us to solidify our brand proposition, integrate advanced digital solutions, and foster innovation to expand the depth of our product range. Ultimately, this translates to delivering greater value for all our stakeholders," he said. "The influx of capital will also empower us to empower a wider range of academic aspirations," Gainda added.

Avanse enjoys the backing of prominent investors including Warburg Pincus, Kedaara Capital, and International Finance Corporation.


Earlier in 2023, Avanse secured INR 800 crore from private equity firm Kedaara Capital. In 2020, the company raised $15 million through the external commercial borrowing (ECB) route from World Business Capital Inc.


Avanse's primary competitors include Eduvanz and Leap Finance. A report published by CARE ratings last year revealed that NBFCs nearly doubled their market share in retail education loans, reaching 18.6% between September 2020 and September 2022. The report attributes this growth to NBFCs' dominance in the overseas student education loan segment.


The fresh infusion of capital will empower Avanse to solidify its position within the education financing sector. The company plans to leverage these funds to create exceptional customer experiences and achieve sustained, profitable growth.


 

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