Indian fintech startups roped in practically $1.7 billion in funding within the first six months of 2020, doubling from final 12 months’s $726.6 million, regardless of the continued coronavirus pandemic, a KPMG report confirmed.
In a tell-tale signal of much more thrilling and promising issues to come back from the burgeoning fintech ecosystem, Indian startups noticed VC financing at a time international fintechs noticed a stark slowdown, falling nearly to 2017 ranges.
Dawn segments equivalent to neobanking and platforms that cater particularly to underserved sections of the inhabitants – whether or not it’s small and medium companies or Tier III and past – have seen vital traction and accelerated progress amidst the pandemic. Even on-line brokerage platforms grew this 12 months, regardless of normal liquidity constraints attributable to layoffs and wage cuts.
Consultants agree that whereas fintechs have been organically rising in India ever since demonetisaton, COVID-19 expedited adoption by quite a lot of years.
With 2020 nearly coming to an in depth, we check out some thrilling developments that occurred in fintech this 12 months:
Paytm’s insurance coverage purchase, and launch of stock-trading and ETF investing providers on Paytm Cash
In July, Paytm introduced the acquisition of normal insurer Raheja QBE – a transfer that takes the Vijay Shekhar Sharma-led startup one step nearer to turning into a monetary powerhouse and in addition India’s first super-app. It additionally ties in with Paytm’s mission of driving monetary inclusion for underserved populations and bringing them into the fold of the mainstream economic system.
In September, the startup launched stockbroking providers on its wealth administration platform, Paytm Cash, permitting retail buyers to commerce purchase and promote equities.
Whereas platforms equivalent to Zerodha and Groww had crushed Paytm to the punch, the Noida-based startup’s attain and extent – particularly in decrease tier cities – give it a leg-up over its opponents.
The 10 lakh buyers the startup hopes to onboard by the tip of this fiscal 12 months are anticipated to be first-time customers from small cities and cities.
In October, the fintech large launched ETFs on its platform, concentrating on practically one lakh customers within the subsequent 12-18 months. ETF investments on Paytm Cash begin at Rs 16 in fairness, Rs 44 in gold, and Rs 120 for NIFTY, the corporate stated in a press release.
ETFs aren’t as mainstream an funding device in India as they’re within the US or Europe, regardless of there being round 69 totally different sorts of ETFs throughout index, gold, fairness, and debt classes.
PhonePe crosses 250 million registered person milestone
The Flipkart-owned platform stated it hit the 250 million registered person milestone in November and added that it anticipated to cross 500 million customers by December 2022.
In October, the corporate stated it had processed a document 925 million transactions worth $277 billion, and processed 835 million UPI transactions, capturing greater than 40 % of the whole market share.
Lately, after the Indian festive season, PhonePe stated it had emerged because the “largest platform” by way of digital gold buy, capturing practically 35 % of the whole market share. The truth is, gross sales rose greater than six-fold by way of quantity this 12 months, versus 2019, the corporate stated.
First-time buyers flock to on-line buying and selling platforms Zerodha, Groww, and Upstox
Retail buyers from throughout the nation took to equities buying and selling platforms as low rates of interest from FDs and financial savings, in addition to a dip in stock markets throughout the onset of the pandemic, offered a number of profit-making alternatives.
Zerodha, India’s largest on-line low cost dealer, stated the variety of demat accounts opened on its platform between January to May far exceeded total shopper progress final 12 months. The typical age of Robinhood merchants on its platform additionally dropped to 30, and the common ticket measurement to about Rs 80,000.
The rise of on-line buying and selling platforms that cost minimal transaction charges have helped heat individuals as much as the concept of stock buying and selling, which earlier was executed by brokerage companies at hefty prices. Platforms equivalent to Zerodha give customers full management over their monetary transactions, and permit them to work inside their threat appetites.
The truth is, mutual fund SIPs declined in June, indicating that new-age buyers needed extra say in the place their cash was invested and had been extra all for direct investing versus shopping for funds that had been managed by funding bankers.
A SEBI report stated 4.9 million new demat accounts had been opened in FY20, the best in at the very least a decade.
Whereas precise figures on the place most of this demand is coming from aren’t accessible, non-public gamers have stated they had been seeing elevated participation from customers in Tier II and III cities.
Razorpay turns unicorn in the midst of COVID-19 pandemic
Harshil and Shashank, Founders of Razorpay
After elevating $100 million in a Collection D funding spherical co-led by GIC and Sequoia Capital India, Razorpay gained a seat on the nation’s unicorn desk. The startup stated it anticipated to make use of the funds to develop its neobanking platform and its lending arm, in addition to onboard round 500 further staff.
The startup additionally stated it might look intently at making some strategic acquisitions, and put money into startups within the B2B fintech area.
Razorpay, which powers funds for over 5 million companies, together with the likes of Airtel, BookMyShow, Fb, Ola, Zomato, Swiggy, Cred, and ICICI Prudential, amongst others, is ready to double its person base to 10 million by the tip of this 12 months.
UPI transactions hit recent document highs each month
NPCI’s flagship product Unified Funds Interface (UPI) has witnessed a gradual improve in volumes and value of transactions all year long, surpassing even card transactions at one level.
Dilip Asbe, Managing Director and CEO of NPCI, stated at YourStory’s flagship TechSparks occasion final month that India would hit a billion transactions a day over the subsequent 4 years, powered by UPI. The most important deterrents to UPI’s progress in India are small-ticket transactions that drive many of the cash in circulation at the moment.
Asbe stated he aimed to scale back the dependency on cash, and assist increasingly more funds and transactions occur on-line.
NPCI just lately additionally stated that it deliberate to diversify its shareholding by onboarding 131 new companions and elevating Rs 81.64 crore in fairness share capital. The transfer is critical for the organisation since solely banks have owned NPCI’s shares since its inception.
The proposed transfer will allow retail funds firms which have constructed providers primarily based on NPCI’s platforms and banking giants to accumulate stakes in NPCI.
Zerodha bootstraps its manner into the unicorn membership
Nithin Kamath-led on-line brokerage platform – India’s largest – joined the unicorn membership within the first half of the 12 months after conservatively valuing itself at $1 billion.
A uncommon feat for a bootstrapped firm that has by no means raised exterior funding and has been worthwhile, Zerodha’s brother-founders have eschewed the ‘growth-at-any-cost’ method adopted by many Indian startups, selecting as a substitute to give attention to constructing a sustainable enterprise model backed by a strong tech product.
Zerodha additionally joined a number of different Indian startups in asserting a hefty ESOP buyback plan – Rs 65 crore – to create liquidity for its staff.