Avanti Finance
Overview
Avanti Finance is a Bengaluru-based non-banking financial company (NBFC) focused on financial inclusion. Founded in 2018, the company aims to provide accessible financial services to underserved populations in India. Avanti Finance specializes in small-ticket loans for income generation and working capital needs, primarily targeting micro-enterprises and the urban gig economy. The company was co-founded by prominent Indian figures including Ratan Tata, Nandan Nilekani, and economist Vijay Kelkar. Avanti Finance has rapidly expanded its reach across rural and urban India through a digital platform model, raising approximately $80 million in funding from a mix of investors, including the Bill & Melinda Gates Foundation, Oikocredit, and Nomura.
Recent Developments
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December 2024: Avanti Finance secured $14.2 million in equity funding as part of its Series B1B2 round. The investment was led by Dia Vikas Capital along with existing investors such as IDH Farmfit Fund, NRJN Family Trust, and Rabo Partnerships. This funding will be used to increase its loan book, enhance its deep-tech platform, and expand its channels in rural and urban areas.
- The funding will help Avanti augment its distribution network and strengthen its technology capabilities to improve customer borrowing experiences.
- CEO Rahul Gupta highlighted the growth capital's role in expanding Avanti's reach and innovating frictionless credit solutions for its customers.
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Year 2024: Avanti continued to expand its impact in the financial inclusion space despite challenges in the microfinance sector. Its asset under management (AUM) reached INR 1,640 crore, catering to 900,000 low-income households, with a remarkable 90% of borrowers being women.
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April 2023: Prior to the December funding, Avanti raised $24 million in a Series B round. This reflected ongoing confidence from its investors and enabled further scaling efforts in its distribution network across 27 states and over 430 districts within India.
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Financial Performance: In the fiscal year ending March 2024, Avanti reported a significant increase in revenue, rising 2.3 times to Rs 240.40 crore. Despite its losses, which narrowed to Rs 13.8 crore, there was a demonstrated improvement in operational efficiency and an expansion in its lending portfolio, largely attributed to a doubling in interest income.
Company Information
| Attribute | Information |
|---|---|
| Founding Date | 2018 |
| Headquarters | Bengaluru, India |
| Founders | Ratan Tata, Nandan Nilekani, Vijay Kelkar |
| Revenue | Rs 240.40 crore (FY24) |
| Profits | Loss reduced to Rs 13.8 crore (FY24) |
| Key Investors | The Bill & Melinda Gates Foundation, OikoCredit, Nomura, Dia Vikas Capital |
| Industry | Financial Services |
| Number of Employees | Not publicly available |
Early History
Avanti Finance was founded in 2018 with the mission to address the financial needs of underserved and marginalized communities in India. The inception of Avanti Finance was driven by the vision of its founders to utilize technology to democratize access to financial services. The company's foundation was laid on leveraging a digital-first approach, which focused on building an asset-light model that could scale efficiently. By forming strategic partnerships with smaller financial institutions, agritech players, and fintech platforms, Avanti created a comprehensive network capable of reaching micro-enterprises and informal workforce segments. An initial boost from high-profile investors and strategic advice from its founders helped it establish a significant footprint quickly.
Company Profile and Achievements
Avanti Finance operates as a non-banking financial company that prioritizes financial inclusion, aiming to empower low-income households through innovative credit solutions. The company adopted an asset-light model leveraging digital platforms to provide micro-loans tailored to cash flow needs of the users.
- Business Model: Avanti employs a co-lending strategy with microfinance institutions and fintech companies to serve a wide array of clients, including urban gig workers and rural micro-enterprises.
- Platform Utilization: Through a highly scalable digital platform, it offers tailored credit products designed to align with users' livelihood cycles.
- Key Achievements:
- Servicing 900,000 households across 27 states with an AUM of INR 1,640 crores.
- Significant focus on female borrowers, constituting 90% of its client base through a robust, community-led technology model.
- Developed a hyperlocal product innovation strategy, allowing mass customization aligned with localized needs and cash flows.
Current Operations and Market Position
Avanti Finance has cemented its position as a leader in the microfinance space focusing on underserved demographics. With a network spanning over 700 branches in India, Avanti's operations hinge on a unique distribution network that includes strategic partners from the agritech and fintech sectors. Its major competitive advantage lies in its deep tech capabilities and technology-driven approach, which allows it to seamlessly deliver financial products to marginalized communities. Despite encountering some challenges due to rising gross NPAs in the microfinance sector, Avanti remains committed to expanding its AUM and improving borrower experiences by leveraging advanced technology and partnerships.
Conclusion
Avanti Finance plays a pivotal role in the evolving financial landscape of India by providing accessible, technology-driven financial solutions. With a mission centered on empowering marginalized communities, Avanti continues to expand its reach through innovative credit offerings and effective use of digital platforms. Looking ahead, Avanti Finance is well-positioned to further strengthen its market presence and contribute significantly to financial inclusion efforts across India. The company's trajectory indicates a future where it leverages its scalable platform to enhance financial access for millions more households, representing a transformative force in the sector.