MICROCAPITAL BRIEF: Fairassets, Owner of Indian On-line Peer-to-Peer Lender Faircent, Sells Equity Stakes to Investors Including JM Financial, Aarin Capital, M&S Partners

JM Financial Limited, a financial services firm based in India, recently announced that it has acquired, through its subsidiary, JM Financial Products Limited, a 9.84-percent equity stake in Fairassets Technologies India Proprietary Limited, a peer-to-peer (P2P) lending company. The price paid for the investment has not been disclosed.

Fairassets operates a web portal and mobile application named Faircent.com that connects individuals to borrow from and lend to each other without the intervention of traditional financial institutions. JM Financial’s investment is part of Fairassets’ Series A funding round that also attracted investments of undisclosed sizes from a number of individual investors and previous investors in the firm such as Aarin Capital, an Indian venture capital firm, and M&S Partners, a Singapore-based fund. Vinay Mathews, the founder and chief operating officer of Faircent, noted “We shall utilize these funds to further refine our tech-enabled risk mitigation algorithms through big data analytics, thereby empowering our lenders to take better decision and creating greater access to credit for borrowers”.

For the financial year ended March 31, 2016, JM Financial reported total assets of INR 111 billion (approximately USD 1.7 billion), return on assets of 4.8 percent, return on equity of 15 percent and net income of INR 4 billion (approximately USD 59 million). Faircent.com has approximately 6,000 registered lenders and 25,000 borrowers. No financial information has been made available for Fairassets.

By Imke Herholdt, Research Associate

About JM Financial Limited
JM Financial offers a range of capital market services to cut corporate and individual clients. The group has interests in investment banking, institutional equity sales and brokering, private and corporate wealth management, research, equity brokering, portfolio management, asset management, commodity brokering, non-banking financial company (NBFC) activities and private equity. For the financial year ended March 31, 2016, JM Financial reported total assets of INR 111 billion (approximately USD 1.7 billion),
return on assets of 4.8 percent, return on equity of 15 percent and net income of INR 4 billion (approximately USD 59 million).

About Fairassets Technologies India Proprietary Limited
Founded in 2013 by Rajat Gandhi and Vinay Matthews, Fairassets Technologies India Proprietary Limited is an Indian company that provides a lending platform, Faircent.com, to allow individual lenders and borrowers to connect. Faircent’s technology includes credit appraisals and borrower ratings. It earns revenue by charging a one-time listing fee from both borrowers and lenders. Faircent.com has approximately 6,000 registered lenders and 25,000 borrowers as of 2016. No financial information on the firm has been made available.

Sources and Additional Resources
[1] VCCircle: JM Financial picks up 9.84% stake in P2P lender Faircent
[2] live mint: JM Financial subsidiary invests in P2P lender Faircent
[3] Times of India: JM Financial picks up 10 pc stake in P2P startup Faircent
[4] Faircent: Faircent (Peer to Peer platform) dilutes 9.84% stake to JM Financial subsidiary
[5] Bloomberg: Fairassets Technologies Private Limited
[6] JM Financial
[7] FT.com: JM Financial Ltd
[8] MicroCapital Universe Profile: JM Financial
[9] MicroCapital Universe Profile: Fairassets Technologies India Proprietary Limited

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