September 29, 2022
India's Fintech Industry Obtained 14% Share Of Global Funding In The Sector; New Report

India's Fintech Industry Obtained 14% Share Of Global Funding In The Sector; New Report

According to a recent report, the Indian fintech industry has got $29 billion in funding through 2,084 deals between January 2017 and July 2022, which accounted for about 14% of the total global funding for the sector and acquired the second post globally in terms of deal volume.

According to the “State of the Fintech Union 2022” report prepared by the Boston Consulting Group (BCG) and Matrix Partners India, India’s CAGR in the fintech sector grew by 20%, which was higher than that of the US, the UK, and China, with growth rates of 16%, 15%, and 10%, respectively for the previous three years.

Regarding the number of fintech companies, India currently ranks third in the world, with 7460 fintech firms, behind China with 8,870 fintech firms, and the US with 22,290 fintech companies. 

According to the report, the India fintech ecosystem, which has 23 unicorns out of a total of 106 such firms globally, has grown to the point where it can compete successfully in the international financial services market and set standards for innovation speed, customer inclusion, and growth.

“Clocking over $800 billion annual payments transaction value, fintech has made a strong contribution to the Indian economy and plays a powerful role in providing full-fledged financial services to all Indians. We see this collective segment as mission critical for the $5 trillion Indian economy,” it mentioned.

With Neobanks being the most recent entrants, numerous sizable fintechs had begun operating as of 2008.

While the number of fintech companies increased between 2014 and 2021, funding was scarce until 2015, when the industry experienced a sharp increase in funding.

Payments space was further boosted by Covid, which caused funding to increase by 210% between CY 2020 and 2021.

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“With rising funding and valuations, we have seen an acceleration in the rate at which Fintechs have become unicorns vs the past,” the report said.

The report said that “we have a game-changing 5 years ahead of us as the financial services landscape is expected to have many strong actors on the stage, like large Incumbents, niche as well as diversified non-banks, new-age and mature fintech, aggregators and Financial Service Providers”.

The report also stated that “in the next two to three years, most fintech may not be profitable, according to more than 70% of respondents. While the scale is a significant factor in determining profitability, early-stage attention to “unit economics” is a crucial orientation “.

From 4.5 million in 2021 to 9 million in 2022, the volume of digital investments in India showed a 100% growth.

The report noted that the volume of neo banking increased concurrently from 2.5 million to 4 million, reporting a 60% growth in just one year.

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