2019-07-23

Matrix-backed Five Star Business Finance raises USD 50 Million from TPG

Mumbai, India, July 23rd, 2019: Five Star Business Finance Limited (Five Star), a fast growing, fully-secured small business financing company focused on South India, today announced that it has raised USD 50 million from existing investor, TPG Capital. The company’s first investor, Matrix Partners India, continues to stay invested in the company along with its existing investors Norwest Venture Partners, Sequoia and Morgan Stanley.

This is the second round of investment made by TPG into Five Star and it comes within a year from the initial USD 100 million round raised in August 2018.

Five Star specializes in small business loans to underserved SMEs and micro-SMEs in Tier 3-6 cities and towns. The company currently has about 200 branches spread across 8 states in India. Its current portfolio stands at about Rs. 2500 crores, with benchmark asset quality of sub 1% Gross NPA. 

Despite tough liquidity and credit conditions, Five Star has been able to raise high quality debt including US$100 Mn from Franklin Templeton as the lead investor. Five Star aims to emerge as a market leader in providing small business loans and targets to have a portfolio of about Rs. 4000 crores by the end of this fiscal year.

“Five Star’s approach is laser focused on providing small business loans to underserved customers. Our strong management team has driven rapid growth after building a robust foundation. With acute focus on profitability and asset quality, we’ve created a scalable business model recognized by all of our investors and debt partners. Our vision is to double our AUM this year with continued asset quality to build towards IPO scale and look forward to continued support from our partners”, said Mr Lakshmipathy, Chairman and Managing Director, Five Star.

Vikram Vaidyanathan, Managing Director, Matrix India commented, “We’re privileged to be Mr Lakshmipathy and Five Star’s first investor and have a ring side seat to their amazing growth journey. Their focused product approach, critical underwriting process, profitability focus and relentless execution has made them the market leader in their segment. We believe in their vision of creating a financial services institution with IPO scale and wish them god speed on the journey ahead“.

About Five Star Business Finance:
Five Star Business Finance is a registered non-banking finance company and is headquartered in Chennai. The company was founded in 1984 and has over the years evolved into a specialist business finance company focusing on fully secured small business loans. The company has its presence in eight states of India with about 200 branch locations. The company enjoys a healthy asset quality, managing approximately Rs. 2500 crores currently. As of that date, Five Star’s overall employee base stood at 2250. For more information, visit www.fivestargroup.in
 
About Matrix Partners India:
Matrix Partners India is an investment firm with approximately $1 billion under management. Founded in 2006, the firm invests in companies targeting the Indian consumer and enterprise market at the seed, early and early growth stages. Matrix India has invested in several market leading companies such as Ola (local transportation), Quikr (online classifieds), Practo (digital health platform), Dailyhunt (mobile local language platform), Stanza Living (Student Housing) Limeroad (social e-commerce platform), Mswipe (mobile POS), Five Star Business Finance (SME lending), OfBusiness (credit led B2B marketplace), Vogo (scooter sharing), Ola Electric Mobility (multimodal electric vehicle platform), Razorpay (payments), and ZipLoan (small business lending) among others. Matrix India has advisory offices in Bangalore, Delhi and Mumbai. Matrix Partners has a global network of funds investing in the US, China and India, with approximately $5 billion under management. Further information is available at www.matrixpartners.in