Fintech firm ISFC in talks to raise $12 million in equity and debt

Hyderabad: Fintech startup Indian School Finance Company (ISFC) is in talks with family offices to raise fresh equity of Rs 50 crore and an additional Rs 50 crore in debt (about $12 million overall) through non-convertible debentures in its eighth round of funding.

The education sector lender, which is backed by US-based impact investor Gray Matters Capital and Caspian, has so far raised around Rs 150 crore in equity and disbursed around Rs 350 crore worth of loans.

In view of the adverse financial impact on parents of schoolgoing children due to the Covid-19 pandemic, the Hyderabad-based non-banking financial company is looking to extend interest-free fixed instalment loans and help drive schools towards digital transformation.

ISFC Chief Executive Officer Sandeep Wirkhare said talks are on with family offices and high net worth individuals but refused to disclose further details. “We will be diluting less than 15% equity in the eighth round in favour of family offices,” he said. Wirkhare said the company has assigned the capital raising mandate to Anand Rathi.

ISFC said it had raised $10 million from Gray Matters equally via debt and equity in August last year in order to help schools survive and stabilize

operations during the outbreak. The company, which was valued at around Rs 235 crore around 18 months ago, is now valued at around Rs 165 crore due to the pandemic-related loan moratorium.

ISFC is targeting to disburse around Rs 300 crore in the coming academic year to address the pent-up demand from schools affected by the virus outbreak.


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