Sequoia Capital is excited to lead this new round of investment in Ujjivan
Bangalore, India and Seattle, WA (PRWEB) November 21, 2008
Ujjivan Financial Services, a Bangalore, India-based microfinance institution, is pleased to announce the successful completion of the fourth round of equity infusion. Originally planned for USD 15 million, the equity round was over-subscribed and increased to USD 19 million. The incremental capital was largely subscribed by existing shareholders, including Unitus Equity Fund (UEF), managed by Elevar Equity L.L.C.; Bellwether Microfinance Fund; Michael & Susan Dell Foundation; A.W. Holdings; and individual investors, including Ujjivan promoter and CEO Samit Ghosh. Five new investors in this private placement transaction include Sequoia Capital, Lok Capital, Unitus Equity Fund II (UEF II), India Financial Inclusion Fund and SIDBI. The additional funding increases Ujjivan's Paid up Capital and Reserves to more than USD 21 million, and makes Ujjivan the fourth highest capitalized microfinance institution in India. The capital will be utilized to support the Company's major expansion plans over the next twelve months and to meet the enhanced capital adequacy norms set by the Reserve Bank of India.
Speaking on this transaction, CEO Samit Ghosh said "We have expanded our institutional investor base to create a balance between socially- and market-driven private equity investors to ensure that our social mission is not diluted, and at the same time, Ujjivan can maintain ambitious growth plans. We are very pleased to receive the unwavering support of the existing and new investors, especially during these challenging economic times. It is a testament to the future of the microfinance industry in India."
A unique feature of this deal was that Ujjivan, in collaboration with Bellwether Microfinance Fund and UEF, was able to offer its individual investors liquidity by offering to buy out part or all of their investment in Ujjivan and register a good return. This is the first time a microfinance institution has been able to offer a market determined exit to individual investors, and will go a long way to create a secondary market for shares of microfinance companies. S Viswanatha Prasad, Managing Director, Bellwether Microfinance Fund and Caspian Advisors, said, "Creating a secondary market for microfinance institutions' stock is one more critical step in integrating MFIs to capital markets, and in some sense reflects coming of age of this asset class. Bellwether is delighted that it has taken this lead role in the Indian market to provide liquidity to the investors in Ujjivan. Bellwether and India Financial Inclusion Fund are excited to be part of Ujjivan's growth plans and are confident of its success."
Sandeep Farias, Managing Director of Elevar Equity said, "We are proud to continue our association with Ujjivan. Its exceptional performance as an MFI that has balanced commercial performance with social impact is noteworthy and a significant factor in our support. That we have full faith in Samit Ghosh's leadership and Ujjivan's long-term potential is evident in the fact that we have invested from both UEF and UEF II. We are confident that Ujjivan will benefit from the partnerships it has formed through this latest round of investment."
"Sequoia Capital is excited to lead this new round of investment in Ujjivan," said Mohit Bhatnagar, Operating Partner at Sequoia Capital. "The leadership team at Ujjivan has proven that scalable and sustainable microfinance institutions that deliver social solutions are being built in urban and rural India, and have a bright future."
About Ujjivan Financial Services
Ujjivan Financial Services (http://www.ujjivan.com), a Bangalore based microfinance institution focusing on serving the urban and semi-urban poor, completed its third year of operation on November 1, 2008. The Company now operates in eight States with over 165,000 customers, has disbursed Rs.1.6 billion of loans and enjoys a repayment rate of 99.5%. The last three branches Ujjivan opened were in Jamshedpur in Jharkhand and will be opening its 100th branch in Nanjungud, Karnataka on November 22nd, 2008. Ujjivan is a partner of the Grameen Bank of Bangladesh.
Ujjivan Financial Services Pvt. Ltd.
Samit Ghosh, Ujjivan, Mobile: 9900244441 and email: firstname.lastname@example.org
Unitus Equity Fund
Diana Reid, UEF, Phone: +1 206 926 3717 and email: email@example.com
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