When we first met the Saswat team, we immediately saw the strong alignment with our vision of unlocking financial services for India's large, untapped supply chains by leveraging the rapid evolution of technology and digital public infrastructure to bring last mile financial solutions to the ecosystem.
Over time, we've observed how Saswat has been systematically building towards realising this vision—developing an innovative fintech platform that combines deep market insights with cutting-edge technology and alternative data sources to create a compelling value proposition for financing partners and customers. They've built the foundation needed to tap these hard-to-access markets, targeting income-generating assets through an innovative fintech platform. We're thrilled to be partnering with the Saswat team on this transformational journey.
Digitization of Supply Chains: From Invisible to Invaluable
India's $1.5 trillion supply chains across agriculture, food processing, and micro-manufacturing sectors are undergoing a fundamental transformation. These predominantly informal segments have historically remained off the radar of financial institutions due to lack of timely and accurate data on the incomes and cash flows of the small businesses and entrepreneurs driving these chains, their credit histories, particularly in the context of the opacity in operation data and the inherently irregular cash flows.
However, this is changing rapidly. As organized players have targeted these segments, they have implemented cloud-integrated procurement systems, digital payment infrastructure, and real-time operational monitoring, fundamentally transforming these chains.Combined with regulatory frameworks like UPI, GST, e-way bills, and ULI, this new “digital” backbone is generating rich alternative data that enables algorithmic underwriting and supports efficient, last-mile delivery of a range of financial services - opening up unprecedented opportunities for fintech platforms like Saswat that have taken the lead in understanding and building for these segments.
Dairy as Ground Zero: Witnessing Digitization Playbook in Action
The dairy industry exemplifies this transformation and demonstrates the scale of opportunity around income-generating assets across different supply chains and business segments. While milk represents a huge supply chain, growing at 16% CAGR and set to touch $180 billion by 2032, it is also a very fragmented supply chain built on millions of stakeholders, with the penetration of formal financial services still very low.
Over the last few years, the dairy supply chain has witnessed a rapid shift towards organized dairies like Amul, Hatsun, and Milky Mist that have brought in formal and transparent processes for their operations and engagement with stakeholders. These dairies have invested in cloud-integrated infrastructure, created digital milk passbooks and implemented direct digital payments to producers. We saw clear evidence of these changes on the ground during our field tours in Maharashtra and Gujarat and could see that the enhanced incomes/regular cash flows were also prompting local suppliers and associated stakeholders to actively invest in high-yield cattle procurement, cattle management infrastructure and also take up risk protection through insurance products.
With this end-to-end digitization dramatically increasing transparency and generating high-frequency operational data (given the daily production cycles for dairy farmers) to reduce underwriting and collections risk, we see a strong incentive for lenders and others financial services companies to target this large market segment via focused, digital first partners like Saswat that have demonstrated a strong model in a few clusters.
Saswat Finance: Data-Driven Solutions for Digitizing Supply Chains
Saswat Finance stands out as a tech-led, data-driven fintech platform uniquely positioned to unlock last-mile financial services around the ecosystems of mega supply chains. Through their proprietary platform, Saswat delivers superior capabilities for origination and distribution of loans, insurance policies and other financial products to their formal financial partners, while managing digital collections via UPI Auto-Pay and NACH. While their data rich models, which include alternative data sources, are key to supporting underwriting and picking-up early warning systems for lending partners, their modular tech stack offers a strong cost proposition for financial institutions seeking to scale operations across these previously unaddressable segments.
Through their tech-led approach, Saswat has achieved good traction - 6,000+ customers onboarded and INR 55+ crores in asset-backed loan disbursals. Saswat's founding team impressed us with their unique combination of deep financial services expertise, supply chain domain knowledge, tech and execution capabilities. Arun's corporate banking and supply chain experience, combined with Indrajyoti's 14+ years in HDFC banking, Ravi’s track record of partnerships and execution, and Rahul's proven tech leadership, provides confidence in scaling fintech solutions across dairy, agri and food processing, micro-manufacturing - income-generating assets with measurable output patterns in rapidly digitizing supply chains.
Backing the Infrastructure Play for the Next Fintech Frontier
In our view, Saswat is just at an early stage of what promises to be a very exciting journey. Strategically entering through cattle financing, they are building a data lake around high-frequency milk production data, payment data, demographic data at a cluster-level and other relevant alternate data. As the company scales up its operation and gathers more data, they will also get better positioned to leverage the rapidly evolving AI/ML technologies to better understand the needs and open up opportunities across other stakeholders in the ecosystem.
Our investment in Saswat represents more than backing a single company, we're backing the infrastructure that will democratize financial access by leveraging tech and alternate data. It's a conviction play on digitization of mega supply chains, creating some of the largest untapped markets in Indian financial services, and our belief that innovative platforms like Saswat will enable market evolution over the next decade.
