Vridhi Home Finance, a financier for first-time home buyers, is in advanced stages to raise Rs 300-320 crore (around $37 million) in a fresh round led by Norwest Venture Partners, people aware of the developments told Moneycontrol.
Existing investor Elevation Capital and the company’s three founders will also put in money to retain their ownership in the company, they added.
The fresh round of fund infusion comes just a year after it closed an $18 million round, its first-ever institutional fundraise, from Elevation Capital. The two-year old company, founded by veteran mortgage bankers, was then valued at around $70-80 million and is now commanding a valuation nearly double of that at around $150 million, as per sources.
The round is fully primary in nature and is an all-equity deal.
Vridhi Home Finance gives out loans to the borrowers who do not have easy access to credit options while buying their first homes. It typically gives out Rs 8-9 lakh loans and charges borrowers an interest rate of 15-18 percent.
Co-founder and CEO Sunku Ram Naresh confirmed the developments to Moneycontrol.
Asked on why the company was raising fresh funds in a year’s time, he said, “It’s an early round but we would anyway be in the market to raise money 2-3 months later if we had not done the current Norwest one. Cash is the raw material in our business. The more we have to deploy, the larger our business becomes.”
“More capital will also strengthen our balance sheet,” he added.
About 80 percent of the Rs 150 crore ($18 million) that Vridhi Home Finance had raised in October 2023 has already been deployed, Ram Naresh told Moneycontrol.
The company will use the funds to go deeper in states like Karnataka, Andhra Pradesh, Telangana, Rajasthan and Madhya Pradesh to tap more customers and grow its loan book and be present in more locations. The company has grown its presence to 51 branches now, up from 20 same time last year. It aims to add 40 more branches in the next 6-9 months.
A higher number of branches will also help the company push its assets under management (AUM). Vridhi Home Finance currently has Rs 200 crore in AUM and plans to grow it to Rs 500 crore in 6-9 months, Ram Naresh said.
The funding into the space comes at a time when investors are backing traditional businesses that are using tech for enhanced results. Ummeed Housing Finance, a rival to Vridhi Home Finance, also closed a $70 million round, as reported first by Moneycontrol on April 5, as investor interest increases.
Apart from Ummeed Housing Finance, the company also competes with Aavas Financiers, Aadhar Housing Finance and others.
Founded in 2022, Vridhi Home Finance is run by CEO Ram Naresh, chief financial officer (CFO) Sunil Mehta and Sandeep Arora, the chief operating officer (COO). While Ram Naresh has cut his teeth in mortgage banking working with Bajaj Finserv and Aavas Financiers in the past, Mehta was previously with ICICI Bank and Yes Bank. Arora on the other hand worked at Kotak Mahindra Bank and Indiabulls Consumer Finance before starting Vridhi Home Finance.
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