Navi’s Solo Run Ends

For almost eight years, Sachin Bansal has tried to build Navi without having to answer to institutional investors.

The Flipkart cofounder poured a substantial part of his Flipkart exit proceeds, nearly $400-450 Mn, into the financial services venture, betting that technology, cheap capital and a full-stack approach to finance could help Navi become something much larger than a digital lending company.

On August 19, when Dutch investment giant Prosus ploughed $100 Mn into Navi as the first big external funding round, it came as a validation from a large fintech investor for Bansal’s Navi.

But the industry and certain media reports claimed that the much-awaited funding into Navi may have come at a valuation markdown, from nearly $2 Bn when the company was in talks with various investors for a fundraise earlier, to a $1.3 Bn valuation now.

That valuation gap is what makes this deal interesting.

At first glance, Prosus’ investment looks like a vote of confidence for a fintech that has finally turned around its business.

Navi says its lending AUM has crossed ₹13,000 Cr, while its UPI business has become the country’s fourth-largest UPI app. The company also says it returned to consolidated profitability in Q4 FY26.

But the overall numbers also tell another tale. Navi’s consolidated loss widened sharply to ₹466 Cr in FY26 from ₹126 Cr in FY25, with the company attributing the deterioration largely to investments in UPI and newer businesses.

However, a closer look at the financial statements of Navi from FY25 onwards suggests that the financial services company has been struggling to bring down its NPA ratio, with ballooning impairment costs on financial instruments in its FY25 financials compounded by the investments in the payments business for gaining UPI market share in FY26.

So what exactly has Prosus bought into?

Is this $100 Mn a growth cheque for a fintech that has finally found its second act?

Or is it a hard bargain struck by an investor after Navi went through regulatory setbacks, stalled fundraising attempts and a valuation reset?

The answer may lie somewhere in between.

The Long Road To Navi’s First Big Institutional Cheque

“To think that Bansal wouldn’t have been able to get large global and domestic VCs on Navi’s cap table when he was just starting his fintech venture would be folly,” a senior partner at a VC firm investing in fintech startups told us.

But Bansal, according to the person quoted above, was a kind of founder who had the financial capacity to bankroll the company itself.

Bansal ploughed a large chunk of the Walmart-Flipkart payout into what was then BAC Acquisitions, later renamed Navi Technologies. Regulatory filings from the company’s early years show him putting in close to ₹3,150 Cr of personal money. Navi built or acquired businesses across lending, insurance, mutual funds and payments.

Bansal later went on to seek institutional capital and had come close to a commitment of $30 Mn in funding from IFC, the World Bank’s private-investment arm, for a nearly 4.5% stake. However, this capital infusion was tied specifically to Navi’s ambition of turning its newly acquired microfinance unit, Chaitanya, into a full-fledged bank. Similarly, Gaja Capital’s $20 Mn investment also did not go through after Navi’s attempts to acquire a banking licence failed.

Both the investors saw a real promise in Chaitanya.

Chaitanya’s AUM grew rapidly, reaching more than ₹2,600 Cr by FY22, and gave Navi precisely the rural and small-ticket lending exposure that had been central to Bansal’s original financial-inclusion thesis.

However, in May 2022, the RBI rejected Chaitanya India’s application for a universal banking licence, saying the entity was not found suitable for the licence. Bansal said at the time that the decision was not the end of the road.

A few months later, however, Navi was able to secure SEBI’s approval for a ₹3,350 Cr IPO.

The March 2022 DRHP envisaged a completely primary issue, with Navi looking to raise capital to fund its lending business and other growth plans. By September, SEBI had issued its observation letter, clearing the way for the listing.

Yet Navi never launched the IPO.

The proximate explanation was market conditions. The startup ecosystem had entered a sharp correction after the exuberance of 2021, and public-market investors were becoming increasingly sceptical of high-growth technology companies.

Navi’s IPO approval eventually expired, requiring a fresh filing if the company wanted to pursue the listing.

But in August 2023, Navi agreed to sell Chaitanya India Fin Credit to Ananya Birla-backed Svatantra Microfin for ₹1,479 Cr, or about $178.5 Mn. The transaction was completed later that year.

Bansal had effectively given up on owning a full-stack financial services company after the bank application rejection and instead decided to part ways with the microfinance business and focus solely on the digital lending vertical.

There were also fresh reports surfacing in 2025 of Navi relaunching its IPO with the appointment of bankers for the process.

“Bansal has meanwhile been in advanced-stage talks with large global funds including SoftBank for fresh funding, which again did not materialise,” sources said.

In July 2025, Navi was able to secure debt financing of ₹170 Cr, or $20 Mn, led by PhilipCapital and with participation from several other investors.

While reports mentioned that Navi was on track for a listing by 2026, there are no signs yet of the company filing its fresh draft papers for a potential IPO.

While Navi’s focus turned from microfinance to specific digital lending and insurance businesses, the regulatory crackdown that followed further put the brakes on the Bansal-led firm’s growth.

The RBI Crackdown

The biggest complication in Navi’s lending journey was that the core business itself came under regulatory pressure.

For years, lending was the engine of the group. At the time of its IPO filing, lending accounted for roughly 80-90% of Navi’s quarterly revenue, making the business heavily dependent on the economics of credit.

On October 17, the central bank ordered Navi Finserv, along with DMI Finance, Arohan Financial Services and Asirvad Micro Finance, to stop sanctioning and disbursing loans, effective October 21.

The RBI’s stated concern was pricing. The central bank flagged the weighted average lending rate and the interest spread these companies were charging over their cost of funds as excessive, alongside gaps in how they assessed borrowers’ household income and repayment capacity.

The freeze turned out to be short. After several rounds of engagement with the regulator and what the RBI described as revamped internal processes, restrictions on Navi Finserv were lifted on December 2, 2024.

The episode also appears to have triggered a governance response. In February 2025, Navi announced a leadership restructuring: Bansal stepped down as CEO of both Navi Technologies and Navi Finserv, moving to the role of Executive Chairman of the Navi Group, while day-to-day operations were handed to two long-serving members of the founding team — Rajiv Naresh as CEO of Navi (the company rebranded from Navi Technologies to simply Navi in August 2025) and Abhishek Dwivedi as CEO of Navi Finserv.

Bansal’s stated role going forward is strategy, fundraising, M&A and compliance oversight.

Amidst the business restructuring and leadership overhaul, Prosus stepped in as a major investor.

On the growth-fuel side, the strongest evidence is Navi’s UPI trajectory. The company only launched UPI payments in August 2023 and processed a negligible share of national volumes as recently as December of that year.

A cashback and rewards push launched in April 2024, however, changed that quickly. Navi overtook Amazon Pay by August 2024, crossed 1% market share by December 2024, and by mid-2026 had climbed to roughly 3% of UPI volumes and the number-four spot nationally, behind only PhonePe, Google Pay and Paytm, processing close to a billion transactions a month.

However, when it comes to payments, the question of UPI and MDR looms over Navi. 

The bill cleared this month keeps consumer and P2P transactions free and points at a merchant fee on high-value payments — which means the risk to Navi is not that a fee slows its users down, but that the fee arrives in a shape that pays whoever owns the merchant network. 

Navi built its 3% on consumer incentives and small-ticket volume. Whether that converts into revenue, or stays the cost line that widened the FY26 loss, is the part of the growth story Prosus has bought unresolved.

The company also says it reached consolidated profitability in the fourth quarter of FY26, even as its full-year net loss widened. 

Prosus is very likely getting Navi at a valuation lower than Bansal would have accepted two years ago. However, after a banking licence rejection, an RBI ban, stressed assets and rising NPAs, the Flipkart cofounder was not in the same situation as when he sold his ecommerce business to Walmart back in 2018.

Bansal, according to those close to him, would have ideally wanted to steer the ship on his own, but tightening regulations and cash requirements for expansion amidst increased competition in digital lending meant that sooner or later he had to give up on the desired valuation, or some part of the control, to take Navi to a successful listing.

Reading The Prosus Math

A little about what Prosus gets from this deal: It may be too simplistic to view Prosus’ $100 Mn as a bet purely on Navi’s growth.

The assets Navi assembled in its early years still matter. Insurance, mutual funds, lending and payments give the company multiple points of engagement with the same consumer. Even after selling Chaitanya, Navi has retained the ability to offer financial products across several categories. However, selling off its profitable microfinance business at a time when the company badly needed a cash injection may have impacted Bansal’s ability to bargain for the $2 Bn valuation he was seeking in 2023-2024.

This round, according to industry sources, is also reminiscent of Prosus’ broader India fintech playbook.

Through its payments arm PayU, Prosus has a long history in the market of buying its way into scale rather than taking small stakes. The $130 Mn all-cash acquisition of Citrus Pay in 2016, a controlling stake in lending platform PaySense in 2020, and a proposed $4.7 Bn acquisition of BillDesk, which was later terminated, all indicate that the Dutch investment giant wants a bigger slice of the financial services ecosystem in India through controlling stakes.

As recently as March 2025, PayU picked up a 43.5% stake in UPI infrastructure provider Mindgate Solutions.

“That’s a pattern of consolidation and control, built around the idea of assembling an end-to-end payments-to-lending stack in India,” a former payments unicorn startup CXO said.

The Navi deal, however, doesn’t fit that pattern especially well. 

Neither Navi nor Prosus has disclosed the exact stake size, but on the disclosed numbers — $100 Mn into a company valued at roughly $1.3 Bn — Prosus’ holding is somewhere around 7-8%, a minority position, with Bansal remaining firmly in control.

Given that this is not a stake that gives Prosus any control in the short term, this is primarily going to be read as a pre-IPO position and gives the venture capital firm a potentially large exit in the 18 to 20-month horizon.  

Prosus’ own public framing of the deal has leaned less on portfolio strategy and more on relationship and timing. Ashutosh Sharma, who leads Prosus’ India investments, pointed to Navi’s large user base, its multi-line platform, and what he called strong execution over the past year despite a difficult macro environment.

Bansal, on the other hand, referenced a personal relationship with Naspers and Prosus stretching back more than a decade, to Prosus’ earlier backing of Flipkart.

So from the looks of it, this hardly looks like another consolidation play by Prosus at the moment, though it does keep Prosus’ option open to deepen the position later, including potentially around the IPO

[Edited By Nikhil Subramaniam]

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