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TPG Growth Leads $42 Million Equity Investment in Ess Kay Fincorp

Mumbai – October 31, 2018 – TPG Growth, the middle market and growth equity platform of alternative asset firm TPG, today announced that it has closed an investment in Ess Kay Fincorp, a fast-growing non-bank finance company engaged primarily in providing financing for income generation activity to commercial vehicle segment and small businesses. Existing investors Norwest Venture Partners and Evolvence India Fund II Ltd are investing alongside TPG Growth. Additional terms of the transaction were not disclosed.

Founded in 1994 by Rajendra Setia, a first-generation entrepreneur, Ess Kay Fincorp commenced operations as a two-wheeler financier in Rajasthan. With a track-record of over two decades in the financing business, the company has gradually over time expanded its presence across products and geographies. Today Ess Kay Fincorp has a deep rural and semi-urban distribution network of 250 branches providing it with distinct advantages for sourcing and collections. Ess Kay Fincorp currently operates in the states of Rajasthan, Gujarat, Madhya Pradesh, Maharashtra, Punjab and Haryana, servicing mostly low-income, self-employed individuals through innovative approach of validating their creditworthiness, who otherwise have minimal access to organized lending.

“With its differentiated business model supported by a direct sourcing network, hands-on approach to underwriting, quick turnaround and robust collection mechanism, Ess Kay Fincorp has demonstrated a unique advantage and opportunity in a difficult to serve category. We are impressed by the strong and experienced management team at Ess Kay Fincorp and are pleased to partner with them in their next phase of growth” said Gaurav Trehan, Partner at TPG.

“Traditional underwriting methods in India exclude majority of creditworthy individuals and SMEs. Our long-standing and partnership driven approach in our focus geographies has led us to establish a business model that directly addresses the needs of our customers,” said Rajendra Setia, Founder and Managing Director, Ess Kay Fincorp. “I would like to thank our existing investors for their continued support and welcome TPG Growth in whom we’ve found a partner that is fundamentally aligned with our mission and thought process of expanding the company’s geographic reach as well as product portfolio. The firm has an established track-record of partnering with specialized companies in the financial services space and ensuring continuous support in their growth journey. TPG’s investment alongside participation from our existing investors is not only a reaffirmation but also an endorsement of the sincere hard work put in place in building the platform over the last 20 years and at the same time a recognition of our impending potential.  We look forward on working together with our investors to harness the potential of our company.” 

“We have had the privilege of partnering with Ess Kay Fincorp and Mr. Setia, and are pleased to see the significant progress being made by Ess Kay Fincorp, both in terms of growth and also the robust and conservative lending and credit practices being adopted. We are delighted to make a significant reinvestment in this round and look forward to the company achieving even greater heights” said Niren Shah, Managing Director at Norwest Venture Partners.

“Ess Kay Fincorp, under the leadership of Mr. Setia, has achieved several new milestones in its business since our investment last year. We are very confident of Ess Kay Fincorp’s dominant position in the market, strong management team & leadership, robust lending platform and an extensive distribution network which provides opportunity for sustained growth” said Sagar Agarwal of Evolvence India Fund II Ltd.

The financial services sector is a key focus area for TPG in India and Asia more broadly. For more than 15 years, the firm has been partnering with dynamic companies across the region, including Five Star Business Finance, BFI Finance, BTPN, Jana Small Finance Bank, Baidu Financial Services, Shriram City Union Finance, Shriram Transport Finance, and Union Bank of Colombo.

Spark Capital acted as the exclusive financial advisor on the transaction.

 

About TPG Growth

TPG Growth is the middle market and growth equity investment platform of TPG, the global alternative asset firm. With approximately $13.2 billion of assets under management, TPG Growth targets investments in a broad range of industries and geographies. TPG Growth has the deep sector knowledge, operational resources, and global experience to drive value creation, and help companies reach their full potential. The firm is backed by the resources of TPG, which has approximately $84 billion of assets under management. For more information, visit www.tpg.com.

 

About Ess Kay Fincorp

Ess Kay Fincorp, incorporated in 1994, is one of the largest and systematically important non-deposit accepting asset finance retail franchisee in the Indian mid-market space based out of Jaipur. Ess Kay Fincorp offers financing for five different product segments including commercial vehicles, agricultural and construction equipment, passenger vehicles, two wheelers and small business loans. The company has a dominant market leadership position in its focus geographies, deep penetration across 6 states through an extensive distribution network of 250 branches and a sustainable platform to build scale. As on September 30, 2018, Ess Kay Fincorp had an active borrower base of approximately 100,000 individuals and assets under management of approximately INR 15,500 million. For more information, visit  www.skfin.in