Portfolio Management Service

India’s Fintech Sector Is The New Investment Hub

The Indian fintech ecosystem is flourishing all over the world, even in its youth stage. In fact, India has outperformed China and emerged as Asia\’s top center for fintech deals and investments. While Covid-19 had put many industries on back-log, the fintech sector has outperformed.

For India, the fintech industry has emerged as a critical area for collaboration with developed nations – the UK and the USA, especially the UK. This is bound to bring synergy and build a more robust framework. The dominant force is well-positioned to witness rapid growth and significant long-term progress in forthcoming years. This is vouched from the fact that the Indian fintech sector received nearly $2 billion in investments, during the first half of 2021(KPMG).

What\’s New?

India has become a hub of fintech companies, and the startups are making waves here. While Paytm tops the list and is coming with IPO soon, the following companies are making their way too and have attracted investments this year:

Pine Labs ($285 million via private equity)
Cred ($215 million)
Razor Pay ($160 million)
KreditBee ($153 million)
Bharat Pe ($108 million)
OfBusiness ($110 million)

Sanjay Doshi, Partner and Head of Financial Services Advisory at KPMG India, stated that \”Fintech\’s business model, with its inherent benefit of leveraging data besides providing great customer experience, is the biggest attraction for investors.\” He also added, \”Over the next 12 months, we expect leading fintech unicorns trying to tap into the strong capital market by looking at an IPO.\” Almost 90% of the 2020\’s investment ($2.25 billion) has already been accounted for in the first half of 2021; let\’s see what awaits in the next 12 months.

In fact, the insurance technology sector, a subset of the fintech sector, is a significant attraction center for investors too. Some popular insurtech startups like Turtlemint, Digit Insurance, and RenewBuy have received funds from investors via private equity/venture capital of $46 million, $18 million, and $45 million, respectively.

Is It Just India Or Global?

This fintech boom is not only happening in India but also globally. Investment in global fintech sectors reached $98 billion in the first half of 2021, which is $11 billion more than 2020\’s first half. The US alone accounted for over 40% of the total investments, i.e., $42.1 billion.

We are positive and looking forward to the 2nd half of the year for India and the world.

 

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