Flipkart founder Sachin Bansal’s investment vehicle Navi Technologies is in the process of raising $30 million from the IFC (International Finance Corporation) -- the investment arm of the World Bank -- it said in an announcement on its website.
IFC will acquire around 4.5% equity in Navi, which is completely owned by Bansal. This will be utilised by the company to set up Navi Bank, which will focus on mass-market banking solutions for MSMEs (Micro, Small and Medium Enterprises).
Formerly known as BAC Acquisitions, Bansal has infused $123.7 million in Navi so far, with the largest tranche of $123 million coming in November 2019. The investment firm, which was co-founded by IIT-Delhi batchmates Bansal and investment banker Ankit Agarwal, has so far backed 18 companies, with a total investment of $392 million.
Navi technologies is also in the process of acquiring 100% ownership over shares of Bengaluru-based NBFC (non-banking finance company) CRIDS (Chaitanya Rural Intermediation Development Services) for $104 million. This will include the shares of Sachin Bansal and other existing investors.
The parent entity of CRIDS, CIFCPL (Chaitanya India Fin Credit), has also applied for a universal banking license with the Reserve Bank of India. With the investment from IFC and the license, CIFCPL will float Navi Bank. According to the IFC project description, Navi Bank will leverage technology to provide improved access to finance for MSMEs and individuals.
“Building a universal bank is a reflection of our commitment to provide financial services to those who need them most,” Navi’s CEO Bansal said in a statement. “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.”
The last year has seen multiple payment banks, including Paytm Payments Bank and India Post Payments Bank, applying for universal bank licenses towards a more profitable business model.