Rural-focused fintech startup Navadhan raises $1.5 million in funding

With their investment, Varanium NexGen and Gemba Capital are new additions to the four-year old startup’s cap table, per a statement. It has previously raised $14.5 million in both equity and debt across four rounds of investments from Anicut Capital, BOPA, Flowstate and angel investors.

“We will continue to invest in the AceN tech platform. We are improving its information security site, its tech infra site and capabilities so that we’re able to take it up to a scale where we can have at least two crore customers on the platform,” Nitin Agrawal, founder and CEO of Navadhan, told ET.

The company’s platform currently serves 2 lakh customers. Agrawal added that Navadhan aims to grow from Rs 15 crore to 5,000 crore in annual revenues in the next five years.

The AceN platform has features for customers and lenders for onboarding, credit assessment, receiving and making payments, disbursement and collections.

Rs 100 crore disbursed so far

Discover the stories of your interest

With a network of 15 lenders, including Ugro, Vivriti, Northern Arc, Caspian, Unitus and TruCap, Navadhan has disbursed over Rs 100 crore so far.The Mumbai-headquartered company has ground-level customer service officers that onboard and initiate digital lending journeys for rural-India based customers. It also runs physical customer fulfilment centres for outreach.

The company’s customer segment is a layer above the microfinance segment and one layer below the traditional MSME sector, with income ranges of Rs 4 lakh to Rs 40 lakh per annum. About 70% of them have agricultural cultivation as one of their income sources, Agrawal said.

Smart phone and internet penetration is projected to increase by 44% by 2030, with significant growth expected in rural areas, the statement said. “India is growing and rural markets are not far behind. While most of the fintech space is focused on Tier-1,2,3, we saw Navadhan’s focus on the informal market as a potential high-growth area,” said Aparajit Bhandarkar of Varanium NexGen.

Navadhan also plans to introduce new solutions and offerings, including credit limits and technology tools to digitise unorganised value chains, as well as promote climate-smart agricultural practices among its rural customers.

The company was founded by Agrawal, Vijay Haswani, Anirudh Ramakuru and Amit Biswal. Prior to this, Agrawal spent two decades with organisations such as ICICI Bank and Fullerton India. He also served as CEO of Spandana Sphoorty, a listed microfinance institution.

Established in 2019 with a fund size of Rs 140 crore, Varanium NexGen’s portfolio includes investments in fintech startups such as EaseBuzz, Riskcovery, GetVantage, DataSutram and FinVu. It is part of Varanium Capital Advisors, a global multi-asset boutique asset manager focused on emerging market strategies.