Rural Fintech Startup Navadhan Bags Investment To Bridge Gap Between MSMEs & NBFCs

Rural fintech startup Navadhan has bagged $1.5 Mn in a Seed round co-led by Varanium NexGen, a fintech focussed fund and existing investor Anicut Capital. Gemba Capital also participated in the round. 

Founded in 2019, by Nitin Agrawal, Vijay Haswani, Anirudh Ramakuru and Amit Biswal, Navadhan uses data science for its proprietary alternative underwriting model that assesses the digital footprint and cash flow surrogates. This, according to the startup, it solves the lack of income proofs and documents which has kept the banks away from such markets. 

Such technology further solves the challenges of the predominantly cash-based economy and limited banking track record in rural markets.

The Mumbai-based startup is going to use the funds to expand and enhance its AceN Tech platform that serves as a bridge between rural small businesses (MSMEs) and NBFCs and banks to facilitate seamless connections. 

Commenting on the fundraise, Agrawal said, “We are leveraging Tech using alternative-credit, predictive analytics backed by data sciences. With both Tech and People on-ground, we are making it work for the NBFCs and Banks to generate priority sector assets.”

Navadhan claims to have a network of 15 lenders which has enabled it to successfully enrol more than 2 lakh customers and disburse over INR 100 Cr empowering rural enterprises and stimulating economic growth. 

Navadhan aims to leverage the market opportunities as smartphone and internet penetration is projected to increase by 44% by 2030 and grow significantly in the rural areas. As the number of UPI transactions inches towards the $4 Tn mark, most of the future growth will come from rural markets, the startup said. 

Going ahead, Navadhan aims to offer services including credit limits and tech tools for digitising unorganised value chains.

According to Inc42’s State Of Indian Fintech Report Q1 2023, Indian fintech is estimated to reach $2.1 Tn by 2030 at a CAGR of 18%. The growth is evident from the new launches and funding in the sector despite the funding crunch across the Indian startup ecosystem.

Days back (June 17), Tamil Nadu CM MK Stalin laid the foundation stone for the development of fintech city and fintech tower in the state. The state government allocated INR 116 Cr and INR 254 Cr respectively for the projects. 

Earlier this month, lendingtech startup Indifi Technologies raised $35 Mn in its Series E funding round led by funds managed and advised by ICICI Venture, to achieve growth through expansion and increasing market presence. 

In another instance this month, Australia-based consumer finance company Pepper Group announced an investment of $150 Mn over next four years to establish a fintech startup in India under the brand name of Pepper Money.