Five Star Business Finance Limited, a Chennai-based registered non-banking finance company, has raised $100 million led by private equity firm TPG. Existing investors Norwest Venture Partners, an investment fund managed by Morgan Stanley, and Sequoia Capital also participated in the round. The company’s first investor, Matrix Partners India, continues to stay invested in the company.
Five Star is a non-bank finance company providing loans to nearly 40,000 customers. The company focuses on lending to the under-banked population, which typically lacks the financial records necessary to participate in the organized financial sector. Five Star’s customers include small business owners such as single shop retailers like vegetable vendors, provision stores, food retailers and self-employed individuals. The company maintains a healthy asset quality, managing approximately Rs. 1220 crores in assets across more than 150 branches.
“In TPG we’ve found a partner that is fundamentally aligned with our mission to empower India’s under-banked segment. The firm has a long track record of partnering with financial services companies like us that are providing risk-focused, market-specific tools to help businesses grow. This investment in us is a testament to our success and potential as an organization, and we look forward to working together to continue to grow the company,” said D. Lakshmipathy, Chairman and Managing Director, Five Star.
Founded in 1984, the company has its presence in six states of India with over 150 branch locations. Five Star’s overall employee base stood at 1450.
“Five Star is bridging the funding gap for small business owners, providing them with tailored, risk-conscious financial solutions. We are impressed by the company’s differentiated business model and skilled team, and are pleased to partner with them in their next stage of growth,” added Gaurav Trehan, Partner at TPG Capital Asia.
Earlier this month, TPG led a $100 million investment in Bigtree Entertainment Pvt. Ltd, which owns and operates online ticketing platform BookMyShow.