Sachin Bansal’s Navi Technologies, a fintech startup that lends and offers insurance to customers, has filed for a $440 million IPO as the 40-year-old entrepreneur who made his money launching the wave of e-commerce in the country again makes a bold choice.
Navi Technologies’ initial public offering will consist entirely of new shares, and the startup may consider raising a pre-IPO placement, it said in its draft prospectus filed with the local regulator on Saturday.
The IPO comes at a time when tech stocks — or most others — have plunged in recent months. All of the tech startups, including Zomato, Paytm, Nykaa and PolicyBazaar, which went public last year, traded at their lowest prices in recent weeks.
But for Navi Technologies, which has been considering an initial public offering for more than a year, there is also a sense of urgency to take the company public. The startup’s latest attempt to raise funds from SoftBank and other investors at a valuation of more than $4 billion fell apart following its failure to obtain a license to become a bank, according to two people familiar with the case.
Founded in 2018, Navi offers digital personal loans, home loans, and home loans in the lending space. It also offers its clients health insurance and passive fund-focused digital asset management.
Billionaire Bansal, who co-founded Flipkart more than a decade ago and was kicked out of the company before it was sold to Walmart, and Navi have largely stayed out of the spotlight. The draft prospectus (PDF), for the first time, offers colors on the various activities of Navi and its financial health.
“With its in-house NBFC (non-bank lender) arm, AI/ML-based underwriting, and digital-only D2C approach, Navi has been able to exercise control over its lending products, from sourcing, to the subscription to the collection and to offer a good experience to the customers”, describes the startup in the draft prospectus.
Navi says she uses technology to serve customers who have not been served otherwise. The startup provides “instant loan disbursements, offers digital home loans at low interest rates, leverages technology to manage fraud and credit default risk, uses data analytics to train its algorithms to offer attractive pricing and better management of loan accounts and to exercise both digital and field collections to its advantage.
The startup — which reported consolidated profit of $9.2 million in FY21 on revenue of $17.8 million — says its personal loan and retail health insurance products are helping customers to register in less than 4.5 minutes and 2.5 minutes, respectively.
In 21 months since its launch, Navi’s personal loans business has served over 481,000 customers in 84% of Indian postcodes and granted them 2 million Indian Rupees with up to 84 months tenure. The note amount of these loans is $665.
“As of December 31, 2021, 61.17% of our health insurance policies sold were approved without any human assistance on the Navi app. Additionally, we have developed our chat-based interface which ensures that our customers are seamlessly served throughout their buying journey,” adds the startup.
“We offer health insurance premiums through EMI, where a customer can pay a fixed amount each month for their policy, which has made our products attractive and affordable. In the nine months ended December 31, 2021, our GWP was ₹667.60 million, of which ₹63.26 million came from the retail health insurance segment. During the nine months ended December 31, 2021, we issued a total of 220,491 insurance policies, of which 27,800 were retail health insurance policies.