SKS Chairperson and Founder, Vikram Akula, recognized by Time Magazine as one of today's 100 most influential people 

March 29, 2007
Sequoia Invests in SKS Microfinance

Sequoia Leads $11.5 Million Investment Round, Making SKS the Largest Venture-Backed Microfinance Institution in The World

Funds To Be Channeled Towards Providing Financial Services To India�s Poor

Mumbai - March 29, 2007: SKS Microfinance, a new generation microfinance institution (MFI), today announced its latest equity investment of US $11.5 million (Rs.50.6 crores) with Sequoia Capital as its lead investor. Other investors include Unitus Equity Fund, Vinod Khosla, Ravi Reddy, Odyssey Capital, and�from a previous round�SIDBI. The funds will provide the stimulus that SKS needs to achieve its ambitious goal to provide financial services to over 5 million poor families by 2010.

Sequoia Capital has a track-record of providing venture capital to the most promising emerging companies and has invested in Google, Yahoo!, and You Tube among others. SKS�known as the �Starbucks of Microfinance��is one of the fastest growing MFIs in the world with an outreach of nearly 600,000 women borrowers in 7,200 villages in 11 states of India. In the last year alone, SKS grew by nearly 160 percent and has disbursed nearly 700 crores with a 99 percent on-time repayment rate.

Speaking on the announcement, Vikram Akula, Founder & CEO, SKS Microfinance said, �Today SKS has created a model whereby leading global private equity firms like Sequoia feel confident in channeling capital to the hands of the poor. This is significant because it will encourage more commercial capital to come into microfinance and that will ultimately enable greater financial inclusion for India�s 400 million poor people.�

SKS works on three inter-linked principles to scale microfinance. This includes using a for-profit methodology to access capital, drawing on best practices from the business world to speed growth, and deploying technology to overcome high delivery costs.  SKS blends this rigorous business approach with a strong social mission that includes ensuring that its members continue to hold a significant stake in the company and benefit from profits that the company earns.

"We are delighted to be investors in India's leading Microfinance company. Under Vikram Akula's leadership, the SKS team has successfully adapted and executed the microfinance model all across India.  It is wonderful to be an investor in an enterprise that not only makes economic sense but also helps empower the people across our nation. We look forward to working with them in enabling them to become the leading microfinance company in the world.� said Mohit Bhatnagar, Operating Partner, Sequoia Capital India.

�Unitus Equity Fund is proud to be involved in what will be seen as a watershed moment in the world of microfinance. There are two billion people around the world who are living on less than $2 a day, and there is huge market potential in helping these individuals to rise up and work towards a better future for themselves. SKS and outstanding entrepreneurs like Vikram Akula are shining examples of sustainable anti-poverty strategies that UEF investors are proud to support.� said Chris Brookfield, Director, Unitus Equity Fund.

About Sequoia Capital India

Sequoia Capital provides venture and growth equity capital for very smart people who want to turn ideas into companies. As the "Entrepreneurs Behind the Entrepreneurs", Sequoia Capital's Partners have worked with innovators such as Steve Jobs of Apple Computer, Larry Ellison of Oracle, Jerry Yang and David Filo of Yahoo!, Larry Page and Sergey Brin of Google, and Chad Hurley and Steve Chem of You Tube to name a few. Sequoia Capital India provides venture and growth equity capital to entrepreneurs who wish to build world-class companies. Sequoia Capital India manages three funds totaling $750mm focused on investments in India across sectors.

 About the Unitus Equity Fund

The Unitus Equity Fund L.P. is a $23.4 million equity fund which invests in emerging microfinance institutions in Asia and Latin America. The Fund encourages the development of a commercial equity market serving the microfinance industry. A robust equity market will lower the cost and increase the amount of capital available to the world�s poor, furthering the Fund�s goal of increasing global access to microfinance. Launched in the spring of 2006, the Fund has an investment portfolio of two microfinance institutions in India and one in Mexico. Here The Fund is affiliated with Unitus, Inc., an innovative microfinance organization based in Redmond, Washington. 

About SKS Microfinance

SKS is a new generation microfinance institution. It was launched in 1998 because of a fundamental flaw in the microfinance industry�namely, its inability to scale to large numbers of poor. Drawing on research and experience at conventional microfinance institutions (MFIs), SKS identified three main constraints to growth: capital, capacity, and costs. The lack of capital stemmed from the dependence on a limited pool of donor funds; the lack of large-scale operating capacity was the result of MFI management pursuing conventional growth models; and the high costs of delivery resulted from a manually-intensive, high touch distribution model. SKS therefore developed a plan to scale microfinance based on three inter-linked principles that would overcome those barriers. These three were (1) applying a for-profit methodology so that an MFI did not have to depend on limited donor funding (2) using best practices from the business world to speed growth (3) deploying technology to overcome high delivery costs.  The successful combination of these three principles has enabled SKS to become one of the fastest growing microfinance organizations in the world, with a growth rate of 165% and run-rate of 30 new branches and 60,000 new members per month.  Today SKS has gone beyond just providing loans. It offers life insurance to 1.2 million customers and has recently piloted innovative new ventures, including health insurance for the poor and urban microfinance for India�s thousands of slum-dwellers. Its NGO affiliate, SKS Ultra Poor Program, is one of the first programs in the country focused on bringing extreme poor populations into the realm of mainstream microfinance.

SKS currently has 260 microfinance branches in the states of Andhra Pradesh, Karnataka, Maharashtra, Orissa and Madhya Pradesh, Bihar, UP, Rajasthan, West Bengal, Jharkhand, and Chhattisgarh.

For further information, please contact: [email protected]



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