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Ummeed Housing Finance raises $10M; Brings LGT Impact on board
Ummeed will use a portion of the proceeds to further build its technology platform and complete the second phase of its mobility offering
Ummeed Housing Finance has raised $10 million (Rs 72 crore) in its latest round of funding, bringing on board global impact investor LGT Impact. Existing backer Lok Capital also participated in the investment round.
Post the closure of the latest round of equity financing, the Gurgaon-headquartered affordable housing finance company, which caters to the informal and low-income segment, will have raised an estimated Rs 135 crore in funding across three rounds.
“The incremental equity infusion as a result of the series C (funding) will allow us to enhance our borrowings from banks and the bond market, building a reasonable amount of leverage, which, in turn, will facilitate our growth in (assets under management),” Ashutosh Sharma, founder and managing director of Ummeed Housing Finance, told ET.
Ummeed will use a portion of the proceeds to further build its technology platform and complete the second phase of its mobility offering, he said.
LGT Impact is the impact investment arm of LGT, the family office of the princely house of Liechtenstein, one of the world’s largest privately owned private banking and asset management groups with AUM of about $150 billion as of March 2017.
Ummeed, which launched its operations two years ago, has an outstanding loan book of Rs 200 crore, and is targeting assets under management of Rs 350-400 crore by the end of this fiscal year.
Its latest fundraise comes about 16 months after the company secured Rs 36 crore in a funding led by Lok Capital and Duane Park. Unitus Capital acted as the financial adviser for the latest fundraising round.
Founded in 2016 by Sharma, who was previously with Citibank, Ummeed Housing Finance provides housing loans and loans against property ranging from Rs 3 lakh to Rs 25 lakh for tenures of 2-20 years.
The startup’s revenue model is two-fold—earning from monthly repayments by customers on the loans provided to them, as well as through fees from consumers undertaking term insurance covers.
“The affordable housing finance space in India has and continues to draw strong interest from private equity investors, given the sheer size and low penetration of this segment of the housing finance industry,” Sharma said. “News flows around well-priced potential IPOs by some of the early starters in the affordable housing space clearly demonstrates that it is possible to build out a large and profitable business here.”