Total Funding in Indian Fintechs Declined by 40% Last Year, 2023 Showing Improvement India has emerged as a global fintech super-power and is now ranked number 3 in terms of total fintech companies.
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The Indian fintech sector has grown rapidly in recent years, with total funding reaching USD 39 billion in 2022. However, a report from financial services company IIFL Fintech showed that funding declined by 40% in 2022, due to a number of factors, including the global economic slowdown and the war in Ukraine.
The industry saw 476 fintech deals last year and received $6 billion in financing. According to data from the report, India has over 9,500 fintech companies operating in the nation, placing it third in terms of the number of fintech firms after the US (31,950) and UK (12,787).
Paytm, Cred, PhonePe, Pine Labs, and Razorpay were among the companies that received the most money in the fintech sector.
Mehekka Oberoi, Fund Manager, IIFL said, "Indian fintech industry has come a long way from the mid-1990s when online banking services were first introduced. The fast adoption of the mobile phone coupled with cheap Internet access has meant that masses in India have taken to payment apps and on-tap credit solutions. Today, these fintechs have become a "one-stop shop", addressing shortcomings of the traditional financial services industry on one hand, and innovating to create superior experiences."
Another record year is anticipated for the number of ventures receiving private funding in the Indian startup ecosystem. Due to the derating of the global tech industry and the caution of investors in emerging domains like cryptocurrency and the metaverse, large late-stage investors are staying away, but the early-stage ecosystem is humming with activity.
Related Article: India Has the Potential to Become the Fintech Capital of the Globe - Investors
Below are some key highlights from the report:
· The country's payments landscape is set to grow with transaction numbers likely to top USD 100 trillion by 2030
· The digital lending market is expected to grow to a whopping USD 515 billion by 2030.
· The book size of Indian digital lending companies is set to grow from USD 38.2 billion in 2021 to nearly USD 515 billion by 2030, a 33.5% increase in CAGR
· Indian wealth-tech companies are likely to grow from USD 20 billion in 2021 to a whopping USD 237.4 billion by 2030, at a compounded annual growth rate of 31.6%.
· The insuretech sector in India is expected to be worth as much as USD 88 billion by 2030, at a CAGR of ~33.7%.
· The Indian neo-banking sector recorded a five-fold increase in funding in 2021, and the sector is expected to be worth USD 215 billion by 2030 at a CAGR of ~20%.
· The volume of PPI transactions has grown from 493.92 crore in FY21 to 658.12 crore in FY22 and 746.67 crore in FY23. The total value of PPI transactions rose to INR 2.94 trillion in FY22 from INR 1.98 trillion in FY21, before recording a dip to INR 2.87 trillion in FY23.
The disbursement statistics for the third quarter ending December 31, 2022 suggested that the Indian fintech industry has seemingly embraced the RBI norms. The third quarter of FY23 saw disbursements rise 118% year over year and 2% sequentially to INR 18,537 crore, according to data made public by the Fintech Association for Consumer Empowerment, or FACE. Volume growth was 147% year over year and 6% sequentially.
