Navi Success Story - Driving Smooth Transition of Financial Services Even Amidst Pandemic!

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Consumer durable financing demand is expanding across India as the country's urban population grows, brand awareness grows, and disposable income rises. Because it was the only secure and available choice for customers during the lockdown, internet options reported increased usage of financial services.

The Indian banking system is undergoing an unprecedented shift. Digital lending strategies are getting popular, putting banks' conventional retail lending procedures on alert.

Even though the transition is pandemic-driven, the technology revolution that swept the financial world in the pre-Covid eras was on the verge of launching digital lending platforms. However, the virus made it grow at an incredible rate.

In 2018, Sachin Bansal and Ankit Agarwal formed a financial services firm based in India called Navi. The headquarters of the company are in Bangalore. Digital personal loans, home loans, healthcare insurance, mutual funds, and microloans are all available through Navi.

The business today has millions of users, more than 3 billion apps downloaded, 825 thousand or more investors, 36 lakh or more satisfied customers, and 105 thousand or more health insurance policies sold to date.

Navi - Company Highlights

Navi - About and How it Works?
Navi - Industry
Navi - Founders and Team
Navi - Startup Story
Navi - Name, Logo, and Tagline
Navi - Vision and Mission
Navi - Business Model and Revenue Model
Navi - Funding, and Investors
Navi - Investments
Navi - Acquisitions
Navi - Growth and Revenue
Navi - Products and Services
Navi - Layoffs
Navi - Competitors
Navi - Future Plans

Navi - About and How it Works?

Navi is working on a digital lending platform that will make finance-based services more economical, simple, and relevant to everyone. Navi is a digital lending software that offers you loans up to Rs. 20 lakh in an entirely cashless approach. The company's platform enables customers to access financial services at a low cost through customer-friendly and innovation-driven enterprises in the financial services, banking, and insurance spaces.

IT and consulting services, non-banking financial services such as loans and microfinance, insurance products, and mutual funds are among Navi's integrated activities. The Securities and Exchange Board of India has also granted the business a stockbroking and investment advisory license, according to the regulatory filing (SEBI).

The duration of the loans offered by Navi ranges from 3 to 36 months. Navi Finserv also offers 2-wheeler, residential, local business, and educational loans in addition to consumer loans.

Navi works in three simple steps:

• Select the loan and EMI amount.
• Complete KYC using Aadhar and PAN.
• Instantly, money is transferred to your bank account.

Navi - Industry

During the projected period, the digital lending market is estimated to grow at a CAGR of around 11.9% (2022–2026). Because of the COVID-19 outbreak, SMEs all around the world struggled to raise funds to keep their operations running during the crisis period.

An important driver that is driving the industry's expansion is shifting customer expectations and behavior as a result of the numerous advantages provided by the digitalization of banking and financial services. Consumers come from various backgrounds and will need the loan for several reasons, including personal loans, SME financing, and house loans, among many others.

The lending environment has evolved dramatically over the years because of the fast implementation of digitalization in the BFSI business. In several areas around the world, conventional lending is still practiced. The advantages given by digital solution providers, on the other hand, are progressively paving the way for business adoption of digital lending solutions and services.

Furthermore, various technical improvements, such as the widespread usage of smartphones, have resulted in a rise in the acceptance of digital banking across a variety of end-user industries. Artificial intelligence, machine learning and cloud computing are also beneficial to financial institutions and banks because they can analyze large volumes of client data. This data and information are then compared to produce findings on the appropriate assistance that clients desire, thereby assisting in the development of customer relationships.

Navi - Founders and Team

Navi was founded by Ankit Agarwal and Sachin Bansal in 2018.

Ankit Agarwal

Navi's Chief Financial Officer is Ankit Agarwal. Ankit Agarwal studied computer science at IIT Delhi and then obtained an MBA from Ahmedabad's Indian Institute of Management. Agarwal was previously the VP at Deutsche Bank. He also served as VP and Director at Bank of America before founding Navi with Sachin Bansal.

Sachin Bansal

Sachin Bansal joined Techspan after finishing his degree and worked there for a few weeks. As a senior software engineer, he joined Amazon.com India in 2006. He quit Amazon in 2007 and co-founded Flipkart with Binny Bansal, his business partner. Bansal had served as the chairman of Flipkart for over 10 years before leaving the company in 2018. The ex-founder of Flipkart then founded Navi in the same year.

Navi Technologies chief Sachin Bansal announced that the company has appointed Vidit Aatrey as its independent director. The co-founder and CEO of Meesho, Aatrey's appointment has been effective since April 9th, which is still subject to the completion of some formalities. Abhijit Bose, Shripad Nadkarni, and Usha Narayanan are the three other directors named by the company; Bose is the Head of India of WhatsApp and the founder of Ezetap; and Nadkarni has worked with reputed organizations previously like Coca-Cola, Johnson & Johnson, and more. and Narayanan has previous experiences with Lovelock & Lewes Chartered Accountants LLP, PricewaterhouseCoopers, and more.

Navi - Startup Story

After leaving Flipkart in December 2018, Sachin Bansal and an IIT-Delhi alumnus created BACQ Acquisitions Private Limited, which was eventually rebranded ad Navi Technologies Private Limited.

Soon after leaving Flipkart, the co-founder and chairman changed course to continue his mission to make his long-term dream happen. Sachin Bansal had his heart set on another great thing, even as his Flipkart dream came to an end. Bansal's insatiable pursuit of something new can be observed in the fact that he has only spent a few months since leaving Flipkart without investing in or acquiring a firm, mostly for his current venture, Navi Technologies.

Despite the lockdown, Navi's founder and CEO invested INR 3,000 crore in his firm and built a personal lending app. Flipkart, like Navi, which has acquired a series of businesses in the last 2 years, was built on a foundation of mergers.

Navi - Name, Logo, and Tagline

Navi stands for "new" which depicts what the company stands for.

The new India is becoming more and more accepting when it comes to the digitalization of financial services and banking, which is what Navi does.

Navi's tagline says, "Get Instant Loan using Navi."

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Navi - Vision and Mission

Navi's mission statement says, "Our mission is to provide financial products and services that are simple, affordable and accessible by building a customer-centric and technology-first organization."

Navi - Business Model and Revenue Model

When it comes to Navi Technologies Business Model, the company has emphasized technology-enabled financial and banking services, as well as the seamless integration of the neo banking model with traditional banking services and assurance. To gain domain understanding, Sachin Bansal has teamed up with fellow IIT Delhi alumni Ankit Agarwal, who is a banker by profession.

"Building a universal bank is a reflection of our commitment to provide financial services to those who need them most. Our vision is to go beyond what hitherto has been broadly defined as 'financial inclusion and provide access to formal financial services using technology that people can use intuitively and easily." - Sachin Bansal.

It's worth mentioning that Navi only operated for 3 to 4 months in FY19. Navi's NBFC business provided over 72% of this income in the form of interest income and related fees. The remaining 8% and 20% of revenue came from the insurance industry and advisory services, respectively.

Navi - Funding, and Investors

Navi Technologies has raised funding in over 6 rounds the latest round of funding was raised on May 12, 2022.

Navi Technologies, a four-year-old financial business helmed by Sachin Bansal, is the latest Indian fintech startup to submit a DRHP with market regulator SEBI. The loan-providing fintech business plans to raise INR 3,350 crore in the public market.

According to the DRHP obtained, the IPO offer would be made only through a new share issued. This means that no firm shareholders will sell their shares during the Initial Public Offering.

While reading the DRHP, the fact that Navi Technologies' promoter, Sachin Bansal, has a massive 97.39% interest in the business was found. Because the IPO offer does not contain an OFS component, he will keep 97.39% of the stock after the Public Offering. This implies he owns more of his firm than the well-known Nayar family, which runs Nykaa.

Navi - Investments

Navi Technologies has invested in 6 companies.

Navi - Acquisitions

Navi Technologies has acquired 2 businesses to date.

Navi - Growth and Revenue

Sachin Bansal, who has also been the founder of Flipkart, after getting an offer of $16 billion from Walmart, decided to sell his 5.5% stake in the company for Rs 7650 crore. However, this time with Navi, which he founded with a vision to build a financial services behemoth over the next two decades, he remained steadfast, which is the primary reason behind the growth of Navi Technologies. The company is already in the segments of asset management, insurance, and lending and is further looking to expand its horizons. The founder currently owns 97.39% of the company's stakes, as per the reports dated April 3, 2022.

The Navi company has launched a metaverse-based fund of funds scheme, Navi Metaverse ETF Fund of Fund, with the help of its mutual fund arm. Anmol Como Broking sponsors the Fund of Fund scheme of Navi, which will be managed by Navi Mutual Fund. The Fund of Fund scheme-owned assets will be managed by Navi AMC Limited.

According to the company's current documents filed, Sachin Bansal-led Navi Technologies became profitable in the fiscal year 2021, achieving a combined profit of Rs 71 crore. In the previous fiscal year, the firm had lost Rs 8 crore.

On August 18, 2023, Navi reported revenue of Rs. 438.7 crore for the first quarter of FY24 and the previous quarter (Q4 FY23). However, there was a 2.3X increase when compared to the first quarter of the previous fiscal year (Q1 FY23).

Navi Technologies Revenue Breakdown

Navi's sales increased by over 143% as the firm's operations developed and the usage of banking and financial services via internet channels soared during the pandemic. The income was Rs 137 crore, up from Rs 56 crore the previous year, 2020.

The company's total earnings increased by 251% from Rs 199 crore in FY20 to Rs 779 crore in FY21, demonstrating the company's expansion.

The expenditures of Navi have increased by 217% year on year, from Rs 219 crore to Rs 673.8  crore (YoY).

Navi Technologies Expenses Breakdown

Navi Technologies Financials

The EBITDA of Navi improved positively. On a unit level, Navi Technologies has been reported to have spent Rs 0.86 to earn a single rupee of revenue during FY21.

Bansal had broken down the lending business, stating that the company's microfinance loan book was worth Rs 1,500 crore and its non-microfinance loan book was worth Rs 600 crore. According to Bansal, the company was disbursing loans of Rs 350 crore each month.

“We are now comparing ourselves with banks and NBFCs. That is why we describe ourselves as a financial services company that happens to be good in technology. I don’t like the word fintech, lot of fintechs don’t have (lend from) their own books,” Bansal had said.

Navi - Products and Services

Navi App

Navi app was released in 2020, and according to latest news the Navi Mutual Fund has effectively empowered 1 million Indians on October, 2023 by making investing money on the Navi app simple and reasonable.

Navi - Layoffs

According to sources, Navi just let go of 200 employees across the divisions of technology, products, and analytics on July 13, 2023. Employees had no prior knowledge of layoffs, according to sources. Meanwhile, a recruiter reported that the upper management had downsizing plans and that HR policies were in place to make sure that not much severance was needed to be paid.

Company spokeperson said, “Navi conducts performance appraisals twice a year, which results in expected departures from the company. However, Navi continues to have multiple open positions and the company is expected to continue hiring many new employees this year, including a batch of 150+ campus hires who will be joining in August.”

Navi - Competitors

Navi Technologies' main rivals include:

• Autorite Des Marches Financiers
• FIS
• Abhipra Capital
• Tacotax  

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Navi - Future Plans

Navi Technologies, owned by Sachin Bansal, is allegedly aiming to file a draft red herring prospectus (DRHP) with SEBI for a 4,000 crore initial public offering (IPO) shortly.

According to sources, the firm plans to make its initial public offering (IPO) in June of this year. The IPO will be conducted purely through fresh share issuance, with no component of an OFS (offer for sale). Bansal owns almost 97% of the firm and will not dilute his holdings in the IPO.

The IPO is intended to aid Navi's expansion in personal loans, microfinancing, and mutual funds, in addition to its mutual fund operations. Navi is also expected to utilize the funds to fund its expansion goals, which include creating a loan book of 20,000 crores in the next two years and obtaining roughly 15,000 crores in debt from the public markets over the same time frame.

Navi became a public company in February 2022, in preparation for an initial public offering. The fintech firm has enlisted the aid of ICICI Securities, BofA Securities, and Axis Capital to manage its public offering.

FAQs

Who founded Navi?

Sachin Bansal and Ankit Agarwal founded Navi.

When was Navi founded?

Navi was founded by Ankit Agarwal and Sachin Bansal in 2018.

Is Navi NBFC registered?

Navi Finserv (Navi) is an RBI-registered non-banking financial company (NBFC).

How does Navi operate?

IT and consulting services, non-banking financial services such as loans and microfinance, insurance products, and mutual funds are among Navi's integrated activities. The Securities and Exchange Board of India has also granted the business a stockbroking and investment advisory license, according to the regulatory filing (SEBI).

Who are Navi founders?

The Navi startup founders are Sachin Bansal and Ankit Agarwal.