Prosus invests $100 mn in Vastu Housing Finance, acquires 8.4% stake

Amsterdam-based consumer internet group Prosus has invested about $100 million in Mumbai-based housing finance company Vastu Housing Finance Ltd by acquiring an 8.4% stake (7.8% fully diluted), the Dutch company said in its half-yearly disclosure on December 2, 2024. Vastu focuses on affordable housing finance for the low-income and self-employed segments, with an emphasis on backing women borrowers. It serves across 14 states of India, with over 4,500 employees, and assets under management (AUM) of $1.14 billion.

The current fundraising comes following the company's $50 million loan from the United States International Development Finance Corporation (‘DFC’) in September 2024, with a tenure of 20 years. Vastu secured a $50 million commitment in the form of external commercial borrowing (ECB) from the US DFC. The company said the loan would be leveraged to enhance credit access for low-income borrowers, focusing on fulfilling housing needs and encouraging women's homeownership in Tier II to IV towns across India.

Amid this, the company also reportedly received undisclosed funding from private equity firm TA Associates Management LP. In October 2023, Vastu Housing Finance closed a fund raise from Faering Capital, founded by Aditya Parekh and Sameer Shroff. The transaction was a secondary sale by funds managed by Multiples Alternate Asset Management and other shareholders of the company.

Started in 2015 with seed capital, the company has now grown into a large institutional platform, which is backed by marquee investors such as The International Finance Corporation (IFC), Norwest Venture Partners, Creation Investments, 360 One Asset Management Limited, TA Associates and Faering Capital as shareholders.

As per Vastu, it has financially included over 1,20,000 customers having a monthly income of $600, most of whom don’t have formal access to credit from financial institutions in India due to a lack of documented income.

Prosus, meanwhile, said the first six months of the financial year have been a successful period for the group. In its half-yearly disclosure, the company said its operations delivered topline growth of 26%, with consolidated e-commerce revenue of $3 billion. "We increased e-commerce adjusted EBIT by five times to $181m. We recently celebrated the listing of Swiggy, valued at US$11.3bn, and sold US$2bn+ of assets, including a portion of our Swiggy stake and our Trip.com position. Our buyback has created US$36bn of value since launch, with 10% NAV per share accretion, and is the largest globally of any tech company as a portion of market capitalisation."

Private equity and venture capital investments rose 4% year-on-year to $4.7 billion in October 2024 compared with $4.5 billion in the same month last year, according to a report by EY and the Indian Venture and Alternate Capital Association (IVCA).

In a sign of increasing investor confidence in India's startup ecosystem, a total of 984 venture capital (VC) funding deals were recorded during January-October 2024, which was a year-on-year (YoY) improvement of 5.8% in deal volume. The total disclosed funding value of these deals jumped by 44.4% YoY to $9.2 billion during the same period, the latest data by U.K.-based data and analytics company GlobalData shows. Comparatively, a total of 930 VC deals were announced in India during January-October 2023, with the total disclosed funding value of these deals pegged at $6.4 billion.