FinTech in India is on the rise – as per latest reports
India is undergoing a fintech revolution. Recent research by the Boston Consulting Group (BCG) and the Federation of Indian Chambers of Commerce & Industry (FICCI) indicates that nearly two-thirds of the 2100+ fintech companies in India were founded in the past five years. Indian fintech is an extremely promising emerging market valued at USD 150-160 billion by 2025, owing to government policy, regulatory support, rapidly growing smartphone penetration, and a robust talent ecosystem from India’s history as a major IT hub.
Even a year after the pandemic began, the excitement continues unabated. Among Indian start-up sectors, Fintech was the most well-funded by number of deals in Q1 2021, and it was right behind e-commerce in terms of funding. According to BCG-FICCI research, while investments fell from USD 3.7 billion to USD 2.2 billion in 2020, the country remains neck-and-neck with China as the fifth most popular fintech destination worldwide. A total of three unicorns and five soonicorns have emerged since Jan 2020.
Shishir Mankad, Managing Partner and Head – Financial Services at Praxis Global Alliance, a global management consulting firm, says that capital flows into FinTech will continue. Covid has been a major bump in the road, but the advantage of a young demographic is expected to fuel 10-12% nominal GDP growth within the country. With untapped potential such as 70% of transactions still taking place in cash, this is a market that investors cannot ignore for the next decade at least.