Varthana, a finance company which provides loans and support for affordable private schools, has today announced that it has raised $14 million in Series B round of funding from a group of investors.
The current funding round of the company was led by Kaizen Private Equity and Zephyr Peacock India. Along with them, company’s existing investors Elevar Equity, LGT Venture Philanthropy and Omidyar Network also participated in the funding round.
Commenting about the funding round, Steve Hardgrave, CEO of Varthana said,
We are thrilled to have such a great set of investors who are aligned with our vision to improve the quality of affordable education in the country. Their experience and support will be valuable as we extend our branch network, enhance our technology backbone and expand our ‘beyond loans’ initiatives over the coming years.
The Bangalore-based Non Banking Financial Company (NBFC) is working with a mission to improve the quality of education available to low-income Indian youth by providing needed investment capital for the Affordable Private School (APS) segment.
The company was formed in January 2013 by Steve Hardgrave and Brajesh Mishra. It provides specialized loans and other support to affordable private schools in India, promoting access to quality education for India’s poor and emerging middle class.
Within five months of its inception, it was able to secure investment from Accion’s Venture Lab. Later, in August 2014, the company raised Series A round of funding worth Rs. 27 crores, led by Omidyar Network, along with participation of LGT Venture Philanthropy (LGT VP) and Elevar Equity.
Varthana is offering two types of loans – Secured loans and Unsecured loans. Secured loans are of greater than Rs. 5 lakhs for up to 5 years while Unsecured loans are with a cap of Rs. 5 lakhs for up to 3 years.
The loans can be taken for any type of requirement – setting up computer lab, basic school furniture, didactic material and/or learning solutions, renovation, setting up smart classrooms, purchase of school buses, construction of additional classrooms, etc.
Currently, it is providing loans to improve the facilities or to establish another branch of its portfolio school. It is not offering loan to set up new school. There are certain criteria for loans which states that the school must be running for at least two years, it must be stable in its operations, etc.
The company is targeting to increase its footprint across the country, and hopes to work with over 40,000 schools that will impact close to 20 million kids, by 2020.