Mumbai:
Investment in financial technology (fintech) ventures in India nearly doubled to $3.7 billion in 2019 making the country the world's third largest fintech market, as per an analysis by Accenture.
"Fintech investments in India nearly doubled to $3.7 billion in 2019 from $1.9 billion the previous year, putting the country as the world's third largest fintech centre, behind only the US and UK," an Accenture analysis of data from CB Insights said.
The number of deals was up slightly to 198 last year from 193 in 2018, it added.
Investments in payments companies more than tripled to $2.1 billion from about $660 million in 2018, while funding into insutechs rose 74 percent to $510 million.
The vast majority of funds raised last year in India went into payments startups (58 percent), while insurtechs raked in 13.7 percent of the investments and fintechs in lending accounted for 10.8 percent of the total, as per the data.
One97 Communications, the parent company of Paytm, raised $1.66 billion from two separate transactions, while PhonePe tapped investors for about $210 million and Razorpay raised $75 million.
Other large transactions included $282 million raised by PolicyBazaar and $120 million from credit card payments company CRED.
Sonali Kulkarni, Managing Director – Financial Services, Accenture in India said, “There’s a lot brewing in India’s fintech ecosystem and this steady flow of funds shows investors’ confidence in the industry’s future growth potential. The increase both in deal value and the number of deals is a good indicator of what’s to come and bodes well for the future development of cutting-edge financial technology in the country.”
Investment in fintech companies rose sharply in most major markets in 2019 led by gains in the US and UK and emerging economies such as India and Brazil, it said.
Despite those gains, the total value of fintech deals globally dipped 3.7 percent to $53.3 billion in 2019 from $55.3 billion in 2018, when totals were boosted by a record $14 billion from Ant Financial and three other multi-billion-dollar transactions from Chinese companies, it added.
“Despite strong demand for fintech globally, it’s likely that, as startups become more mature, investments will flow to fast-growing economies, where there’s still a huge, unaddressed consumer and corporate market thirsty for innovations,” said Julian Skan, a senior managing director in Accenture’s Financial Services practice.
“For now, there’s still a lot of growth, particularly for challenger banks that are expanding in their home markets and overseas, as well as for payments providers that are embedding solutions seamlessly into our day-to-day activities.”