Varthana Finance, with backing from ChrysCapital, secures debt from BlueEarth Capital and other entities
In a significant move to strengthen its network of affordable private schools across India, Varthana, the ChrysCapital-backed NBFC focused on education, has secured debt funding of INR 159 crore in the financial year 2025 (FY25). The funding was secured from three key global impact investors: BlueEarth Capital, ResponsAbility, and Franklin Templeton Alternative Investment Fund (AIF).
The funding comprises INR 69 crore via External Commercial Borrowing (ECB) from BlueEarth Capital, INR 65 crore via Non-Convertible Debentures (NCD) from ResponsAbility, and INR 25 crore via NCD from Franklin Templeton AIF. This mix of ECB and NCD instruments provides Varthana with a strong capital base to fuel its growth plans.
CEO Steve Hardgrave stated that the investment will strengthen Varthana's network of affordable private schools, particularly in underserved Tier II and Tier III towns and rural areas where conventional funding is scarce. The funds will be used to scale the network, improve access to solar and renewable energy solutions in these institutions, and support partner schools in infrastructure development to enhance the learning environment and accessibility of quality education for low-income households.
Varthana's growth strategy for FY25 focuses on scaling support to affordable private schools nationally, combined with sustainable infrastructure upgrades. A unique aspect of their strategy is integrating solar and other renewable energy solutions in their partner schools, promoting sustainability, reducing long-term energy costs, and fostering resilience in school operations.
For FY25, Varthana's assets under management (AUM) rose 48% year-on-year to INR 1,897 crore. Despite a decline in net profit to INR 24 crore from INR 31 crore for the previous year, mainly due to a high base effect, the student loan book of Varthana surged almost 83% to INR 291 crore.
Founded in 2013, Varthana Finance operates in 16 states and Union Territories, with 40 branches and 150 spokes, primarily serving Tier II and III cities. The company provides financing and academic support to private schools. BlueEarth Capital had previously invested in Varthana in 2019, and ResponsAbility's investment will support the integration of clean energy solutions in schools.
The funding is expected to be disbursed in the third quarter of FY25, as per Steve Hardgrave. To date, Varthana Finance has supported over 12,000 schools and disbursed more than 19,000 loans for school expansion and renovation. This latest funding round underscores the commitment of global impact investors to supporting sustainable and inclusive education in India.
- With the fresh infusion of funds from BlueEarth Capital, ResponsAbility, and Franklin Templeton AIF, Varthana aims to invest in real-estate by expanding its network of affordable private schools, particularly in Tier II, III towns, and rural areas.
- The financing secured by Varthana in FY25 will not only be utilized for scaling the network but also for investing in renewable energy solutions, such as solar power, to enhance the learning environment and accessibility of quality education for low-income households, thus aligning with the company's business strategy focused on sustainability.
