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This Fintech Incubator Wants to Partner With Both Disruptors & Incumbents The Indian fintech space could and should aspire to global leadership like the Indian IT or Pharma industry.

By Sneha Banerjee

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The startup ecosystem is witnessing a phase when one can see a splurge in the number of entrepreneurs exploring the fintech space. The emergence of reforms like Aadhar and UPI (Unified Payments Interface) and the success of Vijay Shekhar Sharma's Paytm, has only acted as a catalyst for entrepreneurs to explore opportunities in this domain.

Rainmatter, a year old initiative founded by Nithin Kamath of Zerodha to promote and nurture young ideas in Indian fintech space, has already invested in 6 startups in the range between $0.1 – 0.5 million. The firm has kept aside a corpus of 40 crores to further invest in interesting ideas in both India and abroad.

Benefits that the incubator gives-

  • Furnished office space with full IT infrastructure
  • Showcase the products to Zerodha's 130 k + active traders
  • Access to Rainmatter's network of fintech companies, venture capitalists and technology talent

Speaking on the key requisites a startup requires being a part of the incubator, Rajiv Sarman Shukla, partner at Rainmatter said that the company would build partnerships with both disruptors and incumbents. "The financial services industry has numerous exciting facets – product innovation, marketing, distribution, advisory and execution. These areas have been differentially driven by people (based in New York and London historically) and technology innovation (Silicon Valley historically). In my experience, I have found many large incumbents keen on partnerships with companies that are seen to be disrupting their established business. There is a great deal of horizontal and vertical co-operation within the Industry and with technology players," Rajiv added.

Rajiv, who recently joined the incubator, said that his role at Rainmatter would be to broaden the funnel of investment evaluation, build relationships with stakeholders in the fintech space, systematize our internal processes and help our portfolio companies scale up.

Dr. Kailash Nadh, who is the co-founder at Rainmatter, said that in the investment tech space has a lot of roadblocks in terms of regulations in India. "If you want to start something in the investment company you need to get multiple licenses, you have to put down huge deposits, get the right infrastructure apart from other things," he added.

How Indian government could promote newer ideas

Talking about the initiative from the Indian government's side, Kailash said that a lot of things need to be digitized when it comes to the investment tech space, citing examples of account opening, digital signatures and others formalities.

Indian fintech space vs US

Rajiv, who has spent 16 years in this space across various countries, said that the story of Indian fintech has been principally about payments companies so far. "I am concerned that many of them don't have viable business models – they are losing money on each transaction so scaling up will only increase their losses. In their search for profitability, many are diversifying out of financial services. This is worrying and can pose systemic risk to the Indian fintech ecosystem. In comparison, the Indian microfinance players have a working business model and are the biggest in the world with 70 million customers."

"The Indian fintech space could and should aspire to global leadership like the Indian IT or Pharma industry. The Indian government has an avowed policy to drive financial inclusion in banking and investing, adoption of electronic currency and efficient payments. These objectives are being driven by the creation of what's referred to as the "India Stack" – a technology environment that rivals the best in the world. I would like to see the addition of Blockchain to the India Stack to drive transparency of money flows across businesses in any sector. On the back of the India Stack and our deep tech talent pool, Indian fintech has the opportunity to leapfrog the sort of legacy infrastructure that is holding back their Developed Market peers."

The incubator aims to help its portfolio companies access global markets and international fintech players to serve the Indian market.

Sneha Banerjee

Entrepreneur Staff

Former Staff, Entrepreneur India

She used to write for Entrepreneur India from Bangalore and other cities in South India. 

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