Rural fintech startup Navadhan raises $1.5M in seed round

Rural fintech startup Navadhan has raised $1.5 million in a seed round of funding led by Varanium NexGen, a fintech-focused fund, with participation from existing investor Anicut Capital and Gemba Capital.

The fund will be utilized to expand and enhance its AceN Tech platform, which serves as a bridge between rural small businesses (MSMEs) and non-banking financial companies (NBFCs) and banks, facilitating seamless connections.

Navadhan’s AceN Tech platform has established a robust network of 15 lenders, including Ugro, Vivriti, Northern Arc, Caspian, Unitus, and TruCap. Through this platform, Navadhan has successfully enrolled over 2 lakh customers and disbursed over Rs. 100 crore, empowering rural enterprises and driving economic growth.

Prior to this funding round, Navadhan had secured pre-Seed funding from Anicut, BOPA, Flowstate, and notable angel investors such as Prasanna Rao (Arya.ag) and Sarah Djari (Impact Fintech PE). With the recent funding, Navadhan has raised a cumulative total of $ 16 million in equity and debt lines, forming partnerships with NBFCs.

Navadhan’s platform offers a seamless digital onboarding experience, simplifying the customer journey and eliminating paperwork. Leveraging data science, the startup’s proprietary alternative underwriting model assesses the digital footprint and cash flow surrogates to address the lack of income proofs and documents that have hindered access to banking services in rural markets. This innovative approach tackles the challenges posed by predominantly cash-based economies and limited banking track records in rural areas.

Nitin Agrawal, Founder CEO of Navadhan, mentioned, ” We are a tech-led and revenue-first fintech. Our mission is to help create new-wealth for the rural small-entrepreneurs by solving their challenges. 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. The new fundraise will add tailwinds to our growth plans. As the Smart-phone and UPI penetration improves, we have an early mover advantage in the rural markets.”

Smart phone and internet penetration is projected to increase by 44% by 2030, with significant growth expected in rural areas. As the number of UPI transactions inches towards the $4 trillion mark, most of the future growth will come from rural markets. Navadhan is well-positioned to leverage the surge in mobile usage, data connectivity, and UPI transactions.

Speaking about the development, Aparajit Bhandarkar of Varanium NexGen mentioned, “India is growing and Rural markets are not far behind. While most of the fintech space is focussed at Tier-1,2,3, we saw Navadhan’s focus on the informal market as a potential high-growth area. Navadhan’s founders are seasoned professionals with credible experience in financial services. With the right TAM, Team, Tech, and Traction, they are building an early mover’s advantage in rural-markets. Tech-led approach gives non-linear scalability to their model. We see Navadhan as a potential market leader in making.”

Navadhan was co-founded by Nitin Agrawal, along with Vijay Haswani, Anirudh Ramakuru, and Amit Biswal. Nitin saw the recent surge of digitisation as an opportunity to build a tech-led finance platform. This comes from his 2 decades of experience with a stint at ICICI Bank leading Product-Tech for micro-banking and agri-channel finance. He was also involved in setting up a rural finance business for Fullerton India. In the recent past, he also served as CEO of Spandana Sphoorty, a listed NBFC-MFI.

Looking ahead, Navadhan plans to introduce new solutions and offerings, including credit limits and tech tools for digitizing unorganized value chains. Another key initiative in ESG space is to propagate Climate Smart Agri practices among its rural-customer base.