Avanti Finance raised USD 24 million in equity capital from Rabo Partnerships, the Rabobank Group’s fully owned subsidiary focused on financial inclusion and rural development, and IDH Farmfit Fund. The financing also included existing investors Oikocredit and NRJN Trust. Avanti’s objective is to provide seamless, inexpensive, and hyperlocal credit products to smallholder farmers in India, allowing them to develop sustainable livelihoods.
Avanti’s investment is consistent with Rabo Partnerships’ “smallholder ecosystem” approach, which focuses on offering data-driven finance solutions to smallholder farmers via local cooperatives and service providers. Smallholders are becoming increasingly crucial in feeding the world’s burgeoning population. Improving farmer households’ access to financial services can aid rural development and global food system reform.
Rahul Gupta, CEO of Avanti Finance said, “We are delighted to have Rabo Partnerships and IDH Farmfit Fund as our new partners with their global experience in the agri space. There is complete mission-alignment to create a population scale, digital financial inclusion platform for the un/underserved segment, including smallholder farmers that constitute 86% of our agrarian economy, yet continue to battle against the circle of poverty. This investment will support ongoing investments in our deep tech platform to develop fit for purpose hyperlocal credit products, automated data & social signals driven underwriting for data-dark customers, amplify our partnership network and accelerate co-lending programs with other financial institutions for capital efficiency. The Avanti team has done a ton of heavy lifting to establish a digital delivery model with our unique paperless, presenceless & cashless approach, served 275K households, disbursed over 1300 crores with a lean team of only 65 employees and zero proprietary branches, showcasing the power of digital & leveraging existing community based networks. We are now ready to take the leap towards 1.5 million served households with a targeted AUM of over 2500 crores in the next 24 months.”
Marianne Schoemaker, CEO Rabo Partnerships at Rabobank said, “Avanti has established itself as a frontrunner in digital and business model innovation by leveraging local organisations and high-tech financial solutions, and we are excited to support its growth. 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. Due to the large number of farmers, the digital infrastructure and the ICT talent available, the Indian market is the ideal place to test and scale innovative solutions for food transition and creating a more inclusive society. This investment supports our strategy of promoting data-driven finance solutions through local cooperatives and service providers, which is close to our roots as a cooperative bank.”
Miguel Tamayo Maertens, Investment Director at IDH Farmfit Fund said, “Avanti has developed a scalable ,digital solution to unlock finance for smallholder farmers. Smallholder farming is at the core of livelihood economic activities in rural India and we are excited to support Avanti’s mission of providing access to timely and affordable finance to millions of farmers. This strategic partnership supports the IDH Farmfit Fund strategy to invest in innovative and impactful solutions that are enabling the access to finance and connected services to smallholder farmers so they can improve their livelihoods”.
Avanti has co-created over 180 customised loan packages to address various sorts of income and livelihood streams. Avanti Finance now has 75 mission-aligned partners in India, including social entrepreneurs, financial institutions, business correspondents, agritech firms, and Farmer Producer Organizations (FPOs) in 24 states and around 300 districts.
Avanti’s legal counsel was Abhiraj Krishna Partners, and its exclusive financial transaction advisor was Unitus Capital.