Ummeed In News

Ummeed Housing Fin Raises $10 m; LGT Impact on Board

Ummeed Housing Finance has raised $10 million (₹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 ₹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, 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, founded in 2016 by ex-Citibanker Sharma, provides housing loans and loans against property ranging from ₹3 lakh to ₹25 lakh for tenures of 2-20 years. The company has an outstanding loan book of ₹200 crore, and is targeting assets under management of ₹350-400 crore by the end of this fiscal year.

Its revenue model is twofold—earnings from monthly repayments by customers on the loans provided to them, as well as through fees from consumers taking term insurance covers.

Ummeed’s latest fundraise comes about 16 months after the company secured ₹36 crore in a funding led by Lok Capital and Duane Park.

Unitus Capital acted as the financial adviser for the latest fundraising round.

“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.”