Varthana Bags $7 Mn Debt Funding To Offer Credit Solutions To Affordable Private Schools
Summary
Varthana will also deploy the funding to transform affordable education in rural India.The low-budget schools in which we invest are counting on inclusive financial services to get back to business following the unprecedented challenges faced during the pandemic. During this challenging post-COVID environment, their efforts are more important than ever.Founded in 2013 by Brajesh Mishra and Hardgrave, the Bengaluru-based startup is a non-banking finance company (NBFC) that offers credit to students and low-budget private schools. In the educational infrastructure loan space, it locks horns with players such as Auxilo, Ugro Capital, EnableCap, IFSC, among others.School infrastructure-focused credit products have seen renewed adoption in recent times. The financial disruption caused by the COVID-19 affected many schools, especially low-budget schools.As banks are shy of lending to these smaller schools owing to higher operating costs and credit risks, the emerging startups are filling in the gap to allow these institutions to improve the quality of education and expand capacity.According to government data, the outstanding education loans of Indian banks stood at INR 89,537 Cr at the end of September 2022, compared with INR 79,917 Cr a year ago.Overall, the fintech space continues to make major strides. The sector emerged as the most attractive bet for investors in India in 2022, raising $4.5 Bn across 250 deals.Earlier on January 3, rural India-focused lending startup SarvaGram closed a $35 Mn Series C funding round from Elevar Equity, Elevation Capital, Temasek and TVS Capital Funds.In December 2022, HDFC Bank acquired a 7.75% stake in fintech startup Mintoak in an all-cash deal, while another fintech player Kredmint raised about $2 Mn in a funding round from multiple VC firms.