Technology-led non-bank finance company (NBFC) Avanti Finance raised $24 million (about ₹197 crore) in funding from Rabo Partnerships, a wholly-owned unit of the Rabobank Group, and IDH Farmfit Fund. Existing investors Oikocredit and NRJN Trust also joined the fundraise.
The Bengaluru-based company said it will use the funds to enhance its deeptech platform and expand its partnerships, among other things.
Avanti uses a digital delivery model based on a paperless, presenceless and cashless approach to lending, aimed at reducing costs and friction for unserved and underserved segments, especially in rural India.
“This investment will support ongoing investments in our deeptech platform to develop fit for purpose hyperlocal credit products, automated data and social signals driven underwriting for data-dark customers, amplify our partnership network and accelerate co-lending programs with other financial institutions for capital efficiency,” said Rahul Gupta, chief executive office at Avanti Finance.
The company has a network of social enterprises, financial institutions, business correspondents, agritech firms and Farmer Producer Organisations (FPOs) across 300 districts in 24 states in India.
So far, the company has disbursed over ₹1300 crore of loans to about 275,000 households without any proprietary branches. In the next 24 months, it aims to expand to 1.5 million households with ₹2,500 crore in assets under management.
The latest fundraise comes about 18 months after Avanti said it had raised $15 million as part of its Series A extended round in October 2021. Backers included Oikocredit, Nomura, The Bill & Melinda Gates Foundation and Dr K R Shroff Foundation.
For Rabo, the investment is in line with its “smallholder ecosystem” strategy, which focuses on providing data-driven finance solutions to smallholder farmers through local cooperatives and service providers.
“We believe in Avanti’s vision of financial inclusion, especially for the agricultural sector, where access to appropriate financial services remains a challenge for many,” said Marianne Schoemaker, CEO, Rabo Partnerships.
“This investment supports our strategy of promoting finance solutions through local cooperatives and service providers, which is close to our roots as a cooperative bank,” she added.
Miguel Tamayo Maertens, Investment Director at IDH Farmfit Fund said the partnership supports the fund’s strategy of investing in innovative and impactful solutions that are enabling the access to finance and connected services to smallholder farmers to improve their livelihoods.
IDH Farmfit Fund is a €100 million impact investment fund facilitated by IDH, The Sustainable Trade Initiative, and a few banks.