India Challenges China in Global Fintech Fundraising
India and China both saw 29 deals in Q1'19
India overtook China in funding as China's fintech funding fell off in Q1 of 2019, accordingto the Global Fintech Fundraising report by CB Insights. The India deals were flat compared to the same quarter a year prior while China saw deal drop to a 5-quarter low. According to report, due to regulatory tightening in the online lending space, China witnessed the fall as it rattled the investors' attention.
China's Regulatory Limitation
China has rolled out a few measures to cover its financial risks arising from its fledgling online lending industry. The government crackdown on online lending space has affected the fintech players who provide individual loan facility, too.
In February, China reportedly seized $1.5 billion from online lenders. China's policy investigated 380 online lenders and froze $1.5 billion in assets in a crackdown following an avalanche of scandals in the huge but lightly regulated industry. This shook the fintech industry in the country and troubled its rapid growth.
The report adds that investors poured $286 million into Indian fintech companies across 29 deals in Q1 2019, narrowly beating China as the top Asian fintech market. Chinese fintech companies raised $192.1 million in funding across 29 deals over the period, down from $1.83 billion last quarter.
India v/s China
Due to China's government crackdown on lending policies, India gained the momentum with more deals in fintech space. Lending startups are gathering steam as they, like their Chinese counterparts, tailor services to the country's large unbanked and underbanked consumers and enterprises. Moves from tech leaders are also set to send ripples through the rest of the industry. Amazon finally followed its rivals Paytm, Google Pay and PhonePe to start offering peer-to-peer payments in the country. Walmart is closely watching how Flipkart, which it bought out last year, applies data to payments' solutions.
Top Fintech Fundraiser
US remained the top fintech market with 170 deals and $3.3 billion raised. Europe, which beat Asia as the second top fintech market, saw 102 companies taking in $1.7 billion.
The UK led as the top fintech market in Europe with $645 million invested across 42 deals. Besides, UK and Germany went head-to-head on funding in Q1. Germany was the second top market in Europe with $588million invested across 15 deals. Germany saw the largest funding round in Europe in Q1'19, a $300million investment to N26. The deal valued the challenger bank at $2.7 billion, making it Germany's first fintech unicorn.