New Delhi: Private equity firm LeapFrog Investments has led a ₹279-crore funding round in Mumbai-based Auxilo Finserve that gives education loans to students aspiring to study in India and abroad.
LeapFrog made the investment from its ₹5,000-crore fund, which focuses on financial inclusion and healthcare opportunities in India, marking its first investment in the country’s education finance sector.
The global investment firm infused $30 million into the company, with an additional $3-4 million coming in from Auxilo’s existing investors Trifecta Leaders Fund-I and Xponentia Opportunities Fund-II. The capital infusion will help Auxilo expand its student loan portfolio.
“This is our first investment in education. It’s a business that blends our core theme of financial inclusion not only by giving out loans but also helps people get access to education, which is tremendously important,” Stewart Langdon, partner at LeapFrog Investments, told Mint.
“We like businesses that are growing very fast and making an impact. Auxilo is enabling some 10,000 people to go overseas this year and achieve their dreams – so it is high growth and high impact. For all those reasons, we are excited about Auxilo”, Langdon said, explaining the rationale behind LeapFrog’s investment in Auxilo.
Investment Growth
He also emphasized LeapFrog’s broader investment strategy in India: “There are two dimensions to what we are looking to do in India – we have a new ₹5,000 crore fund which is looking at financial inclusion and healthcare. You’ll see us do more in healthcare as well. Now we also have a climate strategy. That’s where you’ll see us continue being active in India.”
In response to Mint’s queries, Auxilo said that Since becoming operational in 2018, it has provided education loans to over 12,000 students, across more than 1,100 universities and education institutes in more than 30 countries. The company has also provided finance to over 170 educational institutes for their infrastructure expansion and working capital requirements. In the next 5 years, the company aims to disburse ₹25,000 crore to more than 150,000 students for higher education, skilling, and executive courses, both in India and abroad.
The Mumbai-based education lender said its loans grew at a 75% compound annual growth rate (CAGR) from FY21 to FY24, reaching ₹2,878 crore as of 31 March, 2024. Growth in its disbursements is being driven by the rising demand for higher education, particularly from students in smaller cities, who aspire to study abroad, especially in science, technology, engineering, and mathematics, or STEM, fields.
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