India-based FinTech startup Navadhan has secured $5 million (INR 40 crore) in its Pre-Series A funding round led by Prime Venture Partners. The round also saw participation from existing investors Varanium NexGen FinTech Fund and Gemba Capital. The fresh capital infusion aims to further develop Navadhan's AceN tech platform and expand the company's distribution and service delivery models. Navadhan's AceN tech platform facilitates comprehensive customer fulfillment, encompassing sourcing, seamless digital enrolments, credit underwriting, servicing, and payments to collections. It currently holds over Rs.300 Cr of credit lines from 20 banks and NBFCs on its platform, allowing API integrations for these institutions into their existing systems.

Navadhan employs a unique alternative underwriting model that evaluates digital footprints and surrogate cash flows. This method resolves the issue of inadequate income proofs and documentation that have deterred banks from entering such markets. This approach tackles the hurdles presented by cash-based economies and the limited banking history in rural and informal sectors. Navadhan operates through both human resources and technology, following a hybrid brick-and-click model.

Nitin Agrawal, Founder of Navadhan, commented, "Prime Venture Partners is known for their considerate investment approach, and we appreciated their thorough engagement with the Navadhan team, including their visits and interactions with our clientele. We are enthusiastic about their involvement in our journey to establish a technology-driven business model prioritizing revenue generation and aiming to create new opportunities for rural entrepreneurs. The fresh funding will bolster our efforts in devising solutions to integrate such small businesses into the formal economy. We'll continue developing this platform for banks and NBFCs to capitalize on the regulatory benefits of priority sector assets".

Sanjay Swamy, Managing Partner at Prime Venture Partners, remarked, "Nitin, along with his Co-Founders and the Navadhan team, has demonstrated a highly viable and tech-centric model for distribution, underwriting, and robust collections, utilizing co-lending to achieve significant scalability. We firmly believe they've crafted an appealing model and are thrilled to accelerate the company's growth in its next phase".