India’s Five Star Business Finance bags $234m in a round led by Sequoia; raises valuation to $1.4b

Five Star is an Indian lending firm for small businesses

Faith Baltazar

28 Mar, 2021

India’s Five Star Business Finance bags $234m in a round led by Sequoia; raises valuation to $1.4b | BEAMSTART News

Indian non-banking finance company and lending firm Five Star Business Finance has secured an amount of $234 million in a financing round led by Sequoia Capital.

After the recent funding, Five Star’s valuation has increased to $1.4 billion; the funds raised in the recent round will be used for the firm’s expansion.

According to Five Star, they will be working on strengthening their lending business in order to further provide finances for small businesses across India.

It is also worth noting that the lending firm’s assets rose to $555.3 million in December last year, with a 1.29% gross non-performing assets.

Existing investors of Five Star participated in the round

Along with venture capital firm Sequoia Capital, other existing investors of Five Star including Northwest Venture Partners, KKR, and TVS Capital, participated in the recent funding

Five Star’s investment will be done through a ‘combination of primary infusion and secondary shares’ sold by Morgan Stanley Private Equity, an established investor of the firm.

Morgan Stanley Private Equity Firm 

Five Star funds businesses via collateralized loans

After assessing the borrower’s business loan amount and total household cash flow, the firm provides collateralized loans.

According to the D Lakshmipathy, Chairman and Managing Director of Fivestar, their company fund small-scale startups through “grassroot efforts without compromising on the pillars of asset quality and profitability that are needed to build a sustainable institution of scale,” said D Lakshmipathy, the company’s chairman and managing director.

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