You can be on Entrepreneur’s cover!

Lending Dominated Fintech M&As In 2023: Report The other two sub-sectors with high M&A frequency were Payments and Wealthtech, according to the report by GrowthPal

By S Shanthi

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.


Lending fintechs made 30% of the total fintech acquisitions recorded in 2023 amid increased regulatory scrutiny around the sub-sector, according to an analysis by GrowthPal, a data-driven deal sourcing platform.

The other two sub-sectors with high acquisition frequency were Payments and Wealthtech. While Wealthtech and Payments have recorded high M&A volumes for the past two years, the spurt in lending sub-sector acquisitions is a recent trend. This could be an aftermath of the growing regulatory scrutiny in the lending space, says the report.

According to the GrowthPal database, there have been around 30 acquisition deals in the Indian Fintech space in 2023 as compared to 37 and 29 deals in 2022 and 2021 respectively. Some of the notable M&A deals in lending were Bridge2Capital acquired by IIFL Finance, FinFort acquired by Yubi, and ORO Wealth acquired by InCred Capital among others.

There has also been a decline in the establishment of new fintech startups over the years. In 2023, around 20 Fintech startups were incorporated in India, as compared to 45 and 73 new startups in 2022 and 2021 respectively. This is about 70% less than the new fintech startups incorporated in 2021.

"During 2020 and 2021, both regulators and founders gained insights into the capabilities and limitations of emerging fintech products. However, the subsequent introduction of new regulations and compliance measures across industries has created a challenging environment for launching new fintech ventures," said Maneesh Bhandari, founder and CEO of GrowthPal.

The report added that while these protective measures are essential for industry integrity, they have inadvertently impeded the establishment and growth of innovative fintech startups, contributing to the observed reduction in new company formations in the fintech sector.

Out of the 30 acquisitions in 2023, 20 buyers were large acquirers (>1000 employees or funding > $50 Mn), 6 were mid-sized acquirers (>500 employees or funding >$20 Mn) and 5 were small acquirers (<500 employees or funding <$20 Mn).

The present and future of fintech ecosystem

According to the report, the fintech ecosystem relies heavily on venture capital (VC) backing to ensure the viability of its operations, as monetization has been a challenge in the fintech space. "As a result, startups operating in the fintech sector have found themselves relying extensively on VC funding to support and propel their growth initiatives, encompassing strategies like mergers and acquisitions (M&A) and expansion into new markets," said Bhandari,

The global fintech sector garnered $46 billion in funding between Q3 2022 to Q3 2023, as compared to the $119 billion raised between Q2 2021 and Q2 2022. Talking about the future outlook for the Fintech sector, the report said, "In 2024, the trends that will dominate the fintech place include disruption by AI in financial services, the rise of digital lending marketplaces through open banking and APIs, and the increasing significance of sustainable solutions for fintech to address industry challenges and remain competitive." Further, RegTechs are also expected to play an important role in reshaping the fintech landscape, with AI and data analytics simplifying compliance and reducing costs.
S Shanthi

Former Senior Assistant Editor

Shanthi specializes in writing sector-specific trends, interviews and startup profiles. She has worked as a feature writer for over a decade in several print and digital media companies. 


News and Trends

Home Improvement Platform Arrivae Secures INR 21 Cr from Mithun Sacheti

With a mission to enable emotions through home design, the Mumbai-based platform aims to deploy the funding to expand its distribution further.

Business News

This One Word Is a Giveaway That You Used ChatGPT to Write an Email, According to an Expert

"Delve" has increased its presence in written work since ChatGPT entered the scene.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.


The 11 Best Self-Employed Jobs for Today's Market

Are you looking to step away from the normal workflow and become your own boss? Check out these 11 business ideas to become a boss today.

Side Hustle

This Dad Started a Side Hustle to Save for His Daughter's College Fund — Then It Earned $1 Million and Caught Apple's Attention

In 2015, Greg Kerr, now owner of Alchemy Merch, was working as musician when he noticed a lucrative opportunity.

Starting a Business

4 Common Mistakes That Will Spell Doom Your Ecommerce Business

It's hard to spot a success story before it happens, yet it's easy to tell if a business will struggle. With that in mind, here are the four most common mistakes people make that you should avoid when starting an ecommerce business.