Rural fintech startup Navadhan has raised $5 million (around ₹ 40 billion) in a pre-A round led by Prime Venture Partners. Existing investors Gemba Capital and Varanium NexGen Fintech Fund also participated.

The new funds will fuel the startup's AceN technology platform, which connects small rural enterprises with NBFCs and banks and expands its distribution and service delivery model.

Navadhan, which also owns a non-banking finance business, was founded by Nitin Agrawal, Vijay Haswani, Anirudh Ramakuru, and Amit Biswal. Agarwal was responsible for setting up rural finance firm Fullerton India and served as the CEO of Spandana Sphoorty.

Navadhan's AceN technology platform enables full-service customer fulfillment, including acquisitions, digital records, credit insurance, servicing, payments, and collections. Credit facilities of over ₹300 crore are available from 20 banks and NBFCs on its platform.

Nitin Agrawal says, “We are excited to have [Prime VP] join us on our journey to build a technology business model with revenue first and a vision to create wealth for rural entrepreneurs. The new fundraising tailwinds our efforts to create solutions to bring such small businesses into the formal economy. We will continue to build on this for banks and NBFCs to leverage the regulatory advantage of primary sector assets.”

Sanjay Swamy, managing partner, Prime Venture Partners says, “India's SME sector has always been credit-starved, but it remains one of the country's critical growth sectors. Nitin, his co-founders, and the Navadhan team have demonstrated a highly viable and technology-driven distribution, insurance, and collection model leveraging crowdfunding to achieve significant scale.”