The fintech investment in India, despite all the havoc wreaked by COVID-19 all over the world, has been able to keep booming in leaps and bounds.
Homegrown fintech startups, by accelerating the growth of payments and financial services, are squeezing every bit out of the digital transformation the country has been undergoing currently.
According to a report by KPMG which is one of the ‘Big Four’ accounting organizations in the world, even though massive disruptions in economic activities were observed across the globe, India’s fintech space acted immensely active in the first six months of 2020. The fintech startups in India received a hefty $1,699.9 million investment in H1 2020, across 70 deals. This is more than double to the amount to the year-ago period wherein this space raised $726.6 million. Thus, this shows that both the scope and emergence of fintech companies has been busted wide open in India.
In the report, KPMG International stated that the total investments by private equity players, venture capital funds and also mergers and acquisitions by corporate biggies in the domestic fintech space in Q1 2020 witnessed deals being closed worth $1,052.4 million in 38 transactions.
In Q2 2020, the total investments involving 32 deals did dip to $647.5 million but considering that the entire world was undergoing severe social distancing measures and lockdowns, the figures are quite encouraging.
Comparatively, in Q1 2019 a mere $272.6 million flew in through merger and acquisition (M&A) routes, venture capital and private equity, while Q2 2019 saw only $454 million in total investments.
The Indian fintech startups which attracted some of the big investments are – Navi Technologies which raised $398 million, Pine Labs which bagged $300 million and PaySense got acquired for $185 million by Netherlands-based PayU.
In 2019, a total of $3.47 billion were raised by Indian fintech companies, up from $1.92 billion in 2018 and $2.55 billion in 2017. The agency, in their report, has signalled that India will continue to remain a major opportunity for investors who want to get into the fintech space over the medium and long term.
The global financial technology aka global fintech investments in H1 2020 across M&A, PE and VC recorded $25.6 billion with 1,221 deals. This was majorly driven by a sharp drop in M&A deals which accounted for just $4 billion. In the whole of 2019, the sector managed to attracted investments worth $150.4 billion globally.
This report is the testimony to the fact that the COVID-19 pandemic has definitely fast-tracked the digital economy which, in turn, has lead to the Indian fintech space attracting significant investments by many reputed banks, insurers, and venture capitalists.
It is very likely that the pandemic will be spewing up more innovative solutions in this space as time flies by. Thus, it will remain the key change-making driver for future fintech investments in the rest of the year.
Given how steadily digital trends such as contactless payments and the use of several other digital services are accelerating, it can safely be said that the Indian fintech space will finish off with a strong year when compared to the global scenario in terms of investments.
Now it remains to be seen what the long term future holds for the same. We will keep you updated on all further developments. Until then, stay tuned.