Matrix backed Five Star Business Finance raises $50 Mn

Chennai, India '“ August 10, 2017: Five Star Business Finance Limited ("Five Star') announced today the successful closure of its equity fund raise of INR 333 crore led by Norwest Venture Partners and Sequoia Capital. The existing investors, Matrix Partners and Morgan Stanley Private Equity Asia, also participated in the round.

Five Star operates 110 branches across South India and serves over 18,000 customers and specializes in extending secured, small business and housing loans. For FY18, the Company is expected to double its loan book to INR 1000 crores.

D. Lakshmipathy, Chairman and Managing Director, Five Star remarked, "Five Star plays a very niche role in today's markets by serving the large multitudes of small enterprises which are typically not catered to by most formal financial services players. Over the years, we have developed an expertise in assessing their cash flows and in underwriting their credit, while keeping the asset quality intact. It's a great pleasure to invite two marquee investors '“ Norwest and Sequoia as our partners for growth. They, along with our existing investors '“ Morgan Stanley and Matrix Partners coupled with our 15+ Bank relationships, add tremendous strength to our balance sheet and growth plans, as we aim to emerge as a leading player in the small business and small housing loans segment.'

Vikram Vaidyanathan, Managing Director, Matrix India added, "As his first investors, we've been privileged to partner with Mr Lakshmipathy on his journey of building a long standing financial institution. Their single focus on the small borrower sets them apart and they've strived continuously to set the standard for growth, profitability and governance in this space. We welcome Norwest and Sequoia to the partnership.'

About Five Star:
Five Star is a small ticket business and housing finance company that provides secured loans to MSME customers such as small shop owners (provision stores, small restaurants, textile stores, bakery outlets, medical stores etc), small & medium machine shop operators, self-employed people etc. Five Star also provides loans for the purpose of home improvement to MSME customers. With a loan book of about INR 500 crore, Five Star has served more than 18,000 MSME customers and is present across 110 branches in South India. Five Star plans to further expand its footprint across different states in India. Further information is available at www.fivestarbcl.com

About Matrix Partners India:
Matrix Partners India is an investment firm with INR 4,500 crore under management. The firm invests in companies targeting the Indian consumer and enterprise market at the seed, early and early growth stages. The firm has invested in several market leading companies in the consumer technology space including Ola (local transportation), Mswipe (mobile POS), Quikr (online classifieds), Practo (digital health platform), Dailyhunt (mobile local language platform), Limeroad (mobile social commerce marketplace), Razorpay (payments), Treebo (digital hotel chain) and OfBusiness (B2B marketplace) among others. Matrix Partners has a global network of funds investing in the US, China and India with US $4 billion under management. Further information is available at www.matrixpartners.in