Lightspeed, Premji Invest in talks to back former HDFC veteran's Weaver Services in Rs 1,200 crore round

A bulk of the money will go towards acquisitions.

Weaver Services, a housing finance company started by erstwhile HDFC Limited veteran Satrajit Bhattacharya, is in talks to raise around Rs 1,200 crore (about $140 million) in a fresh round from Lightspeed Venture Partners and Premji Invest, people familiar with the developments told Moneycontrol.

Lightspeed and Premji Invest will each pump in around Rs 400 crore (about $50 million each) to co-lead the round and be equal investors in Mumbai-based Weaver Services. The company will raise the remaining amount from Gaja Capital and a clutch of other angel investors from HDFC Ltd including the bank’s former top boss Keki Mistry, sources said.

This round, which will be Weaver’s maiden fundraise as the company was set up around a month ago, will see founder Bhattacharya dilute a majority of his stake and give significant ownership to different strategic investors early on.

Bhattacharya will remain the vice chairman of the company and Anil Kothuri, former Managing Director/CEO at Fedbank Financial Services Ltd, will run day to day operations at Weaver Services.

A bulk of the money will go towards acquisitions. In October last year, Weaver Services announced that it has acquired Capital India Home Loans for Rs 267 crore. Sources said that the company is negotiating more deals in the space to grow its loan book.

Weaver Services, Lightspeed, Premji Invest, Gaja Capital and Mistry did not reply to Moneycontrol’s queries seeking details.

The round at Weaver is coming together at a time when venture capitalists are gravitating towards non-tech businesses as they look to bet on companies that are at scale and are generating profits at the same time, instead of having to make a trade off.

Investors are also ditching new-age tech companies as they remain loss-making for longer and the path to an exit also remains unclear.

Over the past months, companies like Farmley, VKC Nuts (Nutraj), Haldiram’s, VIP Industries, Theobroma, CityKart and several others, from across sectors have either raised money or are in talks to raise fresh capital from venture capitalists and private equity firms.

While the non-tech space is heating up now, investors have been flocking to housing finance companies (HFCs) in the past few months and Weaver Services is no exception.

In October last year Vridhi Home Finance raised Rs 310 crore (around $36 million) from Norwest Venture Partners. Easy Home Finance, a first-time home loan provider, has raised around Rs 300 crore ($35 million) in its Series B funding round, led by Claypond Capital.

In December last year, Prosus put $100 million into Vastu Housing Finance as investors doubled down on the space. 

While the market is a crowded one, Weaver Services is expected to cater only to the Tier 2, 3 and 4 regions, the lower income households as they become more aspirational and look to own homes.