Allahabad MFI Sonata Finance raises $6.35M from Creation Investments, others

Written by Patrick Fisher September 24, 2012 0 comment

Chicago-based Creation Investments made its first investment in India in 2010 by picking up stake in Eko India Financial Services.

September, 13, 2012: SONATA Finance Pvt. Ltd., an Allahabad based NBFC Microfinance Institution, announced that it has closed its Series D equity raise of Rs.35 crore. The leading investor in this series was Creation Investments, an alternative investment management company in Chicago. Other investors in this round include The Michael and Susan Dell Foundation and Swaminathan Aiyar, a renowned economist.

SONATA currently operates in four states in India: Uttar Pradesh, Madhya Pradesh, Haryana and Uttaranchal. Despite operating in one of the most underserved and poorest regions in India, SONATA enjoys client confidence and profitable operations with a portfolio of approximately Rs.110 crore.

Anup Kumar Singh, Promoter and Managing Director of SONATA, said, “We welcome the support of like-minded stakeholders like Creation Investments which has endorsed our efforts to ensure quality services to the BoP population.”

This is Creation Investments’ first MFI investment in India. Ken Vander Weele, Chief Investment Officer at Creation Investments said, “We are excited to partner with SONATA for it’s growth. We are long-term partners who will provide them with all the necessary support to achieve their mission.”

With offices in Austin, TX and New Delhi, as well as Cape Town, South Africa, The Michael and Susan Dell Foundation funds programs such as SONATA that improve the economic stability of families living in poverty. SONATA impressed investors at the Dell Family Foundation with their performance during the Indian microfinance crisis.

Representatives at both Creation Investments and the Dell Foundation voiced their support of Indian microfinance. Geeta Goel, Director of Microfinance at The Michael and Susan Dell Foundation said, “Despite the crisis, we have remained committed to the sector and continue to support investees that have retained their focus on being client centric, transparent and financially viable.”

“This transaction validates the fact that there is strong interest in [the] Indian microfinance sector,” said Abhijit Ray, Co-founder and Director of Unitus Capital, the sole financial advisor and arranger to SONATA and its shareholders for the transaction.