India fintech investments lead in APAC

• India led in the fintech investments in the Asia-Pacific region, with US$5.94 billion raised across 236 deals last year
• The country’s fintechs are expected to hit a valuation of US$150 to 160 billion by 2025
• In 2022, India has already seen unicorns, with Mamaearth being the first, followed by Fractal Analytics, LEAD School, Darwinbox, DealShare, ElasticRun, Livspace, and Xpressbees

The fintech space in India had a bumper year in 2021 as the country continued to attract investors and entrepreneurs looking at opportunities beyond e-commerce.

According to a new report, the country led in the fintech investments in the Asia-Pacific region, with US$5.94 billion raised across 236 deals last year.

In addition, India also attracted the most funding in 2020, with US$1.50 billion raised across 118 deals. The Indian payments industry also witnessed the highest funding accounting for 45% of total funds raised. The country’s fintechs are expected to hit a valuation of US$150 to 160 billion by 2025.

Notable fintechs making waves in India

India is the next frontier for fintech service providers. It’s a country with a population of 1.3 billion people, making it one of the biggest markets in the world to be explored by any fintech provider. 

The country is home to some of the most innovative fintech firms making global headlines for their unique business models, disruptive technologies, and products. Many Indian fintechs have raised significant capital and gained significant traction over the last few years.

Among the prominent Fintechs making waves in India are PhonePe and Paytm. While PhonePe is a product of Flipkart, Paytm is backed by Alibaba. 

Both have witnessed exponential growth since their inception. They both have become synonymous with mobile commerce and payments solutions in India. They offer similar services such as online money transfers, cashless payments at retail outlets, utility bill payments, shopping vouchers, and even movie tickets.

Unicorn fintech startups in India

The country has the highest adoption rate with over 2,100 fintechs. According to Statista, India has the second-highest number of unicorns in APAC and the third-highest concentration worldwide, behind the US and China. 

Some of the startups that entered the Indian unicorn club in 2021 were BlackBuck, Droom, OfBusiness, Meesho, Chargebee, Flipkart Moglix, BharatPe, CoinDCX, and Innovaccer.

In 2022, India has already seen unicorns, with Mamaearth being the first, followed by Fractal Analytics, LEAD School, Darwinbox, DealShare, ElasticRun, Livspace, and Xpressbees.

The Fintech sector in the Asia Pacific and ASEAN sets records

Meanwhile, venture capital investments in Asia-Pacific-based fintechs surged to a record high of $15.69 billion in 2021, up from $6.73 billion the year before and more than double the prior year’s figure of $5.87 billion.

APAC fintechs sealed 754 deals in 2021, up 81 % and 49 % from 2020 and 2019, respectively.

Findings show that the Southeast Asian fintech sector continues to mature, with a record US$4.7 billion across 217 transactions, up from US$1.13 billion across 118 deals in the prior year.

The report also added that in 2022, private markets would continue to be a crucial source of financing for fintechs as looming interest rate hikes and ensuing stock market volatility cloud the outlook for Initial Public Offerings (IPOs).

 

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