Ummeed In News

PE-Backed Ummeed Housing Snags $20 Mn From Overseas Investor

Ashutosh Sharma, founder and managing director, Ummeed Housing Gurugram-based Ummeed Housing Finance Pvt Ltd, which counts Morgan Stanley Private Equity Asia, Norwest Venture Partners, CX Partners and Lightrock (previously LGT Lightstone Aspada) as its investors, has secured capital from another overseas investor.  

The non-banking finance company (NBFC) that operates in the affordable housing finance segment is set to raise up to $20 million (Rs 166.4 crore) in funding from the US International Development Finance Corporation (DFC).   

The funding will be used for providing long-tenor housing finance to the economically weaker section, lower-income groups and middle-income groups in Tier II, III and IV cities in the country, Ummeed Housing said Monday. 

Specifically, the US DFC is partnering with Ummeed Housing to fund about 2,000 new, low-ticket mortgages, averaging $11,600 (around Rs 9 lakh) in size, with tenures of up to 15 years.  

“This DFC facility allows us to extend long-dated credit to the underbanked population to assist with home purchases, construction, and extension. Our technology-enabled platform delivers shorter turnaround times on these loans which is an important requirement from our customer segment,” said Ashutosh Sharma, founder and managing director, Ummeed Housing.  

Ummeed was founded in January 2016 by Sharma, who had previously worked at Citibank, HSBC, and Bank of Montreal. The company provides loans to families with low and informal incomes.  

It offers loans ranging from Rs 3 lakh to Rs 50 lakh for home purchases, home construction, home renovations and repairs, loans against property and business loans to micro, small and medium enterprises (MSMEs).    

At present, it has more than Rs 1,350 crore in assets under management and is operating 84 branches across seven states in India.  

In 2021, Ummeed raised Rs 270 crore in its Series E funding round led by Norwest and Morgan Stanley PE Asia.   

The DFC is the US government’s development finance institution that works with the private sector to channel development capital into emerging markets.    

This is the second NBFC backed by the DFC within three months. In July, it invested $50 million in debt in Bengaluru-based Vistaar Financial Services Pvt. Ltd, which lends to women-led MSMEs in rural India.    

The DFC has been backing a few other Indian companies and is also a limited partner in a homegrown fund. For instance, the DFC is providing a nearly $6 million loan portfolio guarantee to Annapurna Finance Pvt. Ltd.

The investment is part of the $11 million raise in collaboration with the United States Agency for International Development.   

It is also investing $15 million in early-stage venture capital firm Mumbai-based impact investor Ankur Capital’s third fund. The fund primarily invests in startups leveraging digital and deep science technologies.