Mumbai: Private equity firm TPG Growth on Wednesday said that it had led a $42 million investment in commercial vehicle financier Ess Kay Fincorp Ltd. TPG Growth is American PE investor. Its middle-market fund focusses on growth equity and buyout opportunities.

Existing investors Norwest Venture Partners and Evolvence India Fund II also participated in the funding round.

Founded in 1994 by first-generation entrepreneur Rajendra Setia, EssKay facilitates purchase of used commercial vehicles, tractors, cars and two-wheelers, and provides business loans to small and medium enterprises (SMEs). It currently operates in Rajasthan, Gujarat, Madhya Pradesh, Maharashtra, Punjab and Haryana, across 250 branches, mainly catering to low-income, self-employed individuals.

Spark Capital was the financial adviser to EssKay.

As on 30 September, Ess Kay Fincorp had an active borrower base of around 100,000 individuals and assets under management of 15,500 million.

“With its differentiated business model supported by a direct sourcing network, hands-on approach to underwriting, quick turnaround and robust collection mechanism, Ess Kay Fincorp has demonstrated a unique advantage and opportunity in a difficult to serve category," said Gaurav Trehan, partner at TPG.

Mint reported on September 18 that private equity majors, including TPG, ChrysCapital, Creador Capital and Goldman Sachs were competing to pick up a stake in Ess Kay.

“Traditional underwriting methods in India exclude majority of creditworthy individuals and SMEs. Our long-standing and partnership-driven approach in our focus geographies has led us to establish a business model that directly addresses the needs of our customers," according to Setia, founder and managing director at EssKay Fincorp.

The financial services sector has been TPG Growth’s focus area in India as well as in Asia, with investments in Jana Small Finance Bank, Shriram Transport Finance, Union Bank of Colombo and Baidu Financial Services, among others.

TPG Growth’s $13.2 billion portfolio includes prominent Indian and foreign investments, including vacation rental platform Airbnb, cab-hailing app Uber, eyewear e-tailer Lenskart and entertainment ticketing platform BookMyShow.

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