A fintech revolution is taking place in India. According to recent research conducted by the Boston Consulting Group (BCG) and the Federation of Indian Chambers of Commerce and Industry (FICCI), approximately two-thirds of India’s 2100+ fintech companies were created during the last five years. Due to government policy, regulatory support, rapidly expanding smartphone penetration, and a solid talent ecosystem resulting from India’s history as a major IT hub, the Indian fintech sector is expected to be worth USD 150-160 billion by 2025.
Even a year after the pandemic began, the suspense remains high. Fintech was the most well-funded Indian start-up sector by number of deals in Q1 2021, and it was close behind e-commerce in terms of funding. While investments declined from USD 3.7 billion to USD 2.2 billion in 2020, according to BCG-FICCI study, the country is still tied with China as the world’s fifth most attractive fintech location. Since January 2020, three unicorns and five soonicorns have appeared.
Capital flows into FinTech will continue, according to Shishir Mankad, Managing Partner and Head – Financial Services at Praxis Worldwide Alliance, a global management consulting organisation. Although Covid has been a major stumbling block, the country’s young demography is predicted to propel 10-12 percent nominal GDP growth. With untapped potential like 70% of transactions still taking place in cash, this is a sector that investors can’t afford to overlook for at least the next decade.
India has emerged as Asia’s biggest destination for FinTech deals, leaving behind China. With around 33 deals valued at $647.5 million, India has the highest investment in the FinTech segment compared to China’s $284.9 million during the quarter ended June 30, 2020, according to a research report released by RBSA Advisors. Total investments in India’s FinTech sector crossed the $10 billion mark over the last four-half years i.e. from CY2016 to H12020.
The availability of a technically skilled workforce and the presence of most parts of the financial services and technology ecosystem make Bengaluru and Mumbai the top two headquartered cities for FinTech companies.