Fintech Investment in India Picks Up After Demonetization Move

Over 25 startups in the online lending space have rapidly emerged over the past two years, according to TechCircle analysis.  Despite signs that global fintech investment was slowing in 2016, VCCircle‘s analysis for 2017 suggests that such investment may pick up again.

Arti Singh and Joseph Rai of TechCircle in India reported that the majority of startups in the online lending space receive funding — in fact, these lending sector startups have received the lion’s share of funding, particularly after India’s rupee reform.

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Which startups and which specific fintech sectors are we talking about, exactly?

“Some of these startups are involved in microfinance while others are targeting advisory. In SME financing, startups like Indifi, IndiaLends and ZestMoney have garnered a lot of attention from the investor community.”

VCCircle cites Swissnex India’s report, Fintech in India, as such;

“The two broad segments where Fintech is most active in India are payments and lending. Out of the more than 600 fintech startups currently active in India, around 40% are payments and lending startups.”

VCCEdge also highlights the following online lending startups that have raised funding:

Swissnex further describes India as such;

“With a population of around 1.3 billion, India is a growing market for Fintech. A large percentage of unbanked or underbanked population and the fact that it is a young nation witnessing high growth in digital penetration, makes India an exciting global space for Fintech.

 

With over half a billion dollars flowing into startups, Fintech in India has grown rapidly in the last three years and the segment is expected to grow further. Banks and financial institutions have taken note of this and are actively participating in the ecosystem. The government and regulators have also taken several initiatives to boost the Fintech ecosystem and provide startups with new opportunities to launch competitive products.”

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Swissnex also explained;

“India is considered as one of the top five countries in terms of number of startups. This is set to further increase with digital and smart city initiatives taken by the government of India that are focused on building a connected technology infrastructure in the country. Such an infrastructure would ease the process of customer onboarding and connectivity for Fintech startups. At the time of compiling this report [October 2016], 13+ Fintech incubators and accelerators exist in India.”

The full Fintech in India report is below.

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