January 8, 2020
Data showed that the investments in 2019 were double the corresponding amount in the fintech sector in 2018 (when US$1.25 billion in 206 rounds was raised)
Payment-based businesses were at the forefront of investments, followed by banking tech, accounting tech, insurance platforms, and consumer finance businesses
Among global investors, Sequoia Capital was most active in fintech, while the most active domestic investor in the sector was Matrix Capital
The Indian fintech ecosystem is the third-largest in the world, with industry research projecting that US$1 trillion worth of retail and SME credit will be digitally disbursed by 2029
As per an Economic Times report citing business intelligence platform Tracxn, India’s fintech startups raised US$2.6 billion in 2019, the highest ever in a calendar year, despite a slowing consumption economy. Data from the report also showed that investments in 2019 were double the corresponding amount in the fintech sector in 2018 when US$1.25 billion was raised in 206 rounds.
Among the financial technology startups that have raised capital, payment-based businesses were at the forefront, led by digital payments giant Paytm, which raised US$1 billion in November from US-based T Rowe Price, Ant Financial, and SoftBank. B2B payment service provider Razorpay also raised US$75 million earlier this year from Ribbit Capital and Sequoia Capital, said the report.
Other sub-sectors within fintech that investors were interested in 2019 were banking technology, accounting technology, insurance platforms, and consumer finance business. Among global investors, Sequoia Capital was the most active in the fintech market with 16 fundraising rounds. Omidyar Network, Accel and Y Combinator also made significant investments in the sector. The most active domestic investor was Matrix Capital, followed by ICICI Bank.
The Government’s Digital India mission and its commitment to greater financial inclusion have given the fintech sector its biggest push, leading to heightened activity surrounding tech innovation and project financing interest from around the world. The process, of course, was set in motion with the launch of the state-promoted Unified Payments Interface (UPI) in August 2016. As a result, the number of merchants accepting digital payments has recorded a steep rise in recent years.
The Indian fintech ecosystem is the third-largest in the world, and industry research has projected that US$1 trillion or 60 per cent of retail and SME credit will be digitally disbursed by 2029.