Bessemer Venture Invests In Home First Finance

June 9, 2011 - PRLog -- Bessemer Venture Partners has invested in Bangalore-based housing finance start-up, Home First Finance Company India Pvt. Ltd. Anil Sarin, MD of BVP India, has joined the board of Home First.

Home First Finance was founded in 2010 by former Citibank employees, Jaithirth Rao and P S Jayakumar. Company offers small loans to low-income borrowers for buying homes priced at Rs.5-15 lakh.

Jaithirth held several positions in Citibank in various capacities across Asia, Europe, South America, and North America, while Jayakumar was the Country Head for Consumer Business in India and Asia Pacific and Head for Consumer Lending Business in Asia Pacific.

Last year, both have also started the maiden project 'Vaibhava' of their property development firm Value and Budget Housing Corp. Pvt. Ltd (VBHC) to build 1,900 homes outside Bangalore, each priced at as much as Rs.10 lakh.

Home First Finance has so far sanctioned loans worth Rs.14 Cr to buyers of homes in three affordable housing projects - Vaibhava, and two projects near Mumbai.

SBI, HDFC, LIC housing Finance and ICICI are some of the major home finance companies in India.

While financial companies like Mahindra and Mahindra Financial Services Ltd (MMFSL) and Muthoot Fincorp Ltd have set up units like Mahindra Rural Housing Finance Ltd and Muthoot Housing Finance Ltd respectively to cater to small home loans borrowers.

In March this year, Mumbai-based Micro Housing Finance Corporation Limited (MHFC) raised Rs.19 Cr in its second round of funding from its existing investors Indian Financial Inclusion Fund (IFIF) and the Michael & Susan Dell Foundation. It had raised Rs.6 Cr from them in its first round of funding in 2009.

In 2008, PE firm Carlyle invested in Chennai-based Repco Home Finance, a subsidiary of Repatriates Co-operative Finance and Development Bank.

In 2009, Religare Enterprises entered the housing finance business by acquiring a controlling stake in Maharishi Housing Development Finance Corporation (MHDFC).

This is Bessemer's fifth investment in 2011. Last month, it invested Rs.20 Cr in Mumbai-based power generation company, CleanMax Enviro Energy Solutions Pvt Ltd (CME). It also invested $30 Mn in Kiran Energy Solar Power, followed by participating in $11.25 Mn investment round in NetAmbit Infosource with Helion Ventures and Silicon Valley Bank. Spanco Ltd's power distribution arm - Spanco Power Distribution Private Limited is also raising funds from Bessemer.

Bessemer Ventures began its Indian operations in 2004 with an office in Mumbai and has invested in companies like Orient Green Power, IL&FS Transportation, Applied Solar Technologies, among others.

In April, Bessemer closed $1.6 Bn Bessemer Venture Partner VIII fund, of which 25% will be invested in India.

Bessemer Venture Partners has invested in Bangalore-based housing finance start-up, Home First Finance Company India Pvt. Ltd. Anil Sarin, MD of BVP India, has joined the board of Home First.

Home First Finance was founded in 2010 by former Citibank employees, Jaithirth Rao and P S Jayakumar. Company offers small loans to low-income borrowers for buying homes priced at Rs.5-15 lakh.

Jaithirth held several positions in Citibank in various capacities across Asia, Europe, South America, and North America, while Jayakumar was the Country Head for Consumer Business in India and Asia Pacific and Head for Consumer Lending Business in Asia Pacific.

Last year, both have also started the maiden project 'Vaibhava' of their property development firm Value and Budget Housing Corp. Pvt. Ltd (VBHC) to build 1,900 homes outside Bangalore, each priced at as much as Rs.10 lakh.

Home First Finance has so far sanctioned loans worth Rs.14 Cr to buyers of homes in three affordable housing projects - Vaibhava, and two projects near Mumbai.

SBI, HDFC, LIC housing Finance and ICICI are some of the major home finance companies in India.

While financial companies like Mahindra and Mahindra Financial Services Ltd (MMFSL) and Muthoot Fincorp Ltd have set up units like Mahindra Rural Housing Finance Ltd and Muthoot Housing Finance Ltd respectively to cater to small home loans borrowers.

In March this year, Mumbai-based Micro Housing Finance Corporation Limited (MHFC) raised Rs.19 Cr in its second round of funding from its existing investors Indian Financial Inclusion Fund (IFIF) and the Michael & Susan Dell Foundation. It had raised Rs.6 Cr from them in its first round of funding in 2009.

In 2008, PE firm Carlyle invested in Chennai-based Repco Home Finance, a subsidiary of Repatriates Co-operative Finance and Development Bank.

In 2009, Religare Enterprises entered the housing finance business by acquiring a controlling stake in Maharishi Housing Development Finance Corporation (MHDFC).

This is Bessemer's fifth investment in 2011. Last month, it invested Rs.20 Cr in Mumbai-based power generation company, CleanMax Enviro Energy Solutions Pvt Ltd (CME). It also invested $30 Mn in Kiran Energy Solar Power, followed by participating in $11.25 Mn investment round in NetAmbit Infosource with Helion Ventures and Silicon Valley Bank. Spanco Ltd's power distribution arm - Spanco Power Distribution Private Limited is also raising funds from Bessemer.

Bessemer Ventures began its Indian operations in 2004 with an office in Mumbai and has invested in companies like Orient Green Power, IL&FS Transportation, Applied Solar Technologies, among others.

In April, Bessemer closed $1.6 Bn Bessemer Venture Partner VIII fund, of which 25% will be invested in India.


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