Janalakshmi Financial Gets $10 Mn from Treeline Asia

Mar 2010
Noida, U.P., March, 09 2010 - Janalakshmi Financial Services, a Bangalore based microfinance institution (MFI), has raised $10 million in its series B funding led by Treeline Asia Master Fund. The Hong Kong and Singapore-based hedge fund has invested in this round with Bellwether Microfinance Fund, an existing investor.

The new round would also add another veteran banker to the board of former Citigroup professional Ramesh Ramanathan founded MFI, which focuses exclusively on urban areas. Narayan Ramachandran, the former country head of Morgan Stanley India, also invested in Janalakshmi in this round in his personal capacity and has joined its board.

Lok Capital and the Michael and Susan Dell Foundation are the other investors in Janalakshmi. Grameen Capital India was the advisor to Janalakshmi for this deal.

Janalakshmi Financial Services will now look at a nationwide expansion in the coming 12 months.

“We are very happy to have closed our second round of funding in a very quick time – it’s a validation of our approach to addressing issues of financial inclusion in a unique social business model, and are especially delighted have Treeline join our investor group," said

Ramanathan in a release, referring to the entire promoter stake being held in a not-for-profit Section 25 Company, Janalakshmi Social Services.

Tree Line has been an active player in the Indian capital markets and is one of the largest hedge funds in Asia. The firm recently invested in the pre-IPO round of cable television and broadband services provider Hathway Cable & Datacom.

Indian microfinance has been attracting investments from a variety of investors like the sector-focused players Aavsihkaar and Lok Capital to sovereign wealth funds like Temasek and blue chip venture capital firms like Sequoia. This would be the second direct equity investment by a hedge fund in an MFI - the first coming in 2008 when Sandstone Capital led a $75 million in SKS Microfinance. Indian MFIs have attracted the strongest investor interest with 30% of all microfinance equity transactions in 2009, according to a report by CGAP, a microfinance group based at the World Bank, and J.P. Morgan.

Source : VCCircle

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