Navadhan Nets $5 Mn To Fulfil Financing Needs Of Under-Banked Households & Small Businesses

Rural-focussed fintech startup Navadhan has secured $5 Mn (INR 41.7 Cr) as a part of its Pre-Series A funding exercise led by Prime Venture Partners.

The round also saw participation from the firm’s existing investors Gemba Capital and Varanium NexGen Fintech Fund.

Mumbai-based Navadhan plans to deploy the fresh proceeds to fortify its technology platform AceN as well as scaling up its distribution business and delivery model.

Founded by Nitin Agrawal, Vijay Haswani, Anirudh Ramakuru and Amit Biswal in 2019, Navadhan uses data science for its proprietary alternative underwriting model that assesses the digital footprint and cash flow surrogates. 

The RBI-registered non-banking finance company (NBFC) focuses on customers typically overlooked by traditional banks due to a lack of available banking data on these individuals.

Navadhan’s AceN offers end-to-end services, including customer sourcing, digital onboarding, underwriting, payments, and collections. In addition to its digital platform, the startup also maintains a physical presence on the ground to provide customer service.

“The new fundraise will add tailwinds to our efforts at building solutions to bring such small businesses to the formal economy. We will continue to build it for banks, NBFCs to leverage on the regulatory advantage of priority sector assets,” Agrawal said.

“The MSME sector in India has always been credit-starved and yet remains one of the critical growth sectors in the country. Nitin, his co-founders and the Navadhan team have demonstrated an extremely viable and tech-driven model for distribution, underwriting, and robust collections, while leveraging co-lending to achieve meaningful scale,” said Sanjay Swamy, managing partner, Prime Venture Partners.

In June this year, Navadhan raised seed funding of $1.5 Mn co-led by Varanium NexGen and Anicut Capital.

According to Inc42’s “State Of Indian Fintech Report Q3 2023”, the estimated number of digital payment users in India is expected to reach 1.08 Bn, surpassing the US, the UK and Germany with 320 Mn, 65 Mn and 70 Mn users, respectively, by 2027.

The Indian digital consumer lending sector is expected to touch $720 Bn by 2030, growing at a compound annual growth rate (CAGR) of 22% from 2023. Startups operating in the personal loan segment secured a substantial 86.3% or more than $2.8 Bn of the total $3 Bn+ raised in the digital consumer lending space between 2014 and H1 2023.

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