India has established a strong FinTech sector. More than $18.6bn was invested into the space since 2015, FinTech Global’s data shows, and the country looks to be still pulling in interest.
Since 2015, the sector has seen a compound annual growth rate of 19.1% for FinTech investments between 2015 and 2019. Funding in the country during 2019 did not reach the heights it hit in 2017 when a colossal $8.2bn was invested through 116 transactions. However, last year saw a new record for the number of FinTech investments in India, with 154 being completed, totalling $5.1bn. While funding looked to plummet in 2018, with total investment volume only reaching $1.7bn, the country looks to be thriving now.
The sector has drawn in a lot of big deals over the years. E-commerce platform Flipkart has been responsible for a number of these, having secured a number of billion dollar deals. US retail company Walmart acquired a 77% stake in the business in 2018 in a deal allegedly worth around $16bn. With deals getting larger in the country, the average deal size has grown from $32.1m in 2015 to $38.9m in 2019, indicating that the Indian FinTech sector has matured over the period.
Deals like these have help put India as the second largest FinTech market in Asia, following behind China, which has the crown for the continent. Since 2015, a colossal $98.1bn has been invested into FinTech companies based in Asia, of which, Chinese companies have received 67.1% of this. India follows, with its companies having picked up 17.9% of the total funding in Asia.
Here are five of the biggest FinTech deals to close in India this year so far.
PaySense
Online credit provider PaySense received an investment form Dutch PayTech company PayU. The deal was valued at $185m and saw PayU pick up a controlling stake in PaySense, with plans to merge it with its consumer lending business LazyPay.
PayU bought the controlling stake of PaySense and all its assets at a valuation of $185m, but it is also looking to deploy a further $200m into the business. The Dutch company will invest $65m of that equity capital right away and slowly inject the rest over the next two years.
This deal was completed to help PayU strengthen its position as an alternative in the Indian lending market, which will represent a $1trn opportunity over the next five years, according to research from the Boston Consulting Group.
PayU global head of credit Siddhartha Jajodia said, “Technology has the power to completely transform people’s access to financial services and the credit market in India is ripe for further digital disruption. This merger is the next step in our journey as we accelerate our vision for credit in India.”
PaySense closed its Series B round in 2018 on $18m which was also supplied by PayU. The FinTech’s Series A closed on $5.3m in 2017, with investors including Nexus Ventures and Jungle Ventures.
PaySense is a lending platform which offers personal loans of up to Rs 5 Lakhs ($6,585). Credit decisions are made through the leveraging of millions of data points to build a financial behaviour profile for individuals.
Prashanth Ranganathan, founder and CEO of PaySense, added, “Providing more Indian consumers with access to credit is crucial to helping individuals grow and succeed. PayU is a natural partner for us as we both strive to make finance more simple, accessible and transparent. We’re excited to start bringing our personal loan product to more consumers throughout India and truly democratise credit.”
Navi Technologies
Navi Technologies, which develops consumer-centric technology for the banking space, recently raised around $394.2m in a funding round which was led by Flipkart co-founder Sachin Bansal.
The investment saw Bansal deploy of $33m in cash, while the remaining $350.7m came through financial securities. These included his 94% stake in Chaitanya Rural Intermediation Development Services, a lending company which offers loans for vehicles, small businesses, education and homes.
Navi Technologies own founder Ankit Aggarwal, former HDFC Bank managing director B. Paresh Suthankar and the founders of NBFC CRIDS, also contributed to the funding round.
The FinTech, which was founded in 2018, builds consumer-centric and technology-driven businesses in the banking, financial services and insurance space.
Digit Insurance
Digit Insurance, a digital insurance platform, scored 84m in an investment round from growth investors including A91 Partners, Faering Capital and TVS Capital.
The InsurTech raised the funds to support its growth efforts and increasing the size of its customer base, which currently sits at around five million. In March 2019, the company reached the two million customer landmark.
Consumers can use Digit to purchase vehicle, travel, health, mobile, holiday home and shop insurance. Not only can users buy policies, but they can also make claims or make renewals to policies.
The company launched its operations in 2017 and has increased its distribution channel partners to include e-commerce companies like Policybazaar, Flipkart and Cleartrip. Currently, the platform has a network of 1,500 strategic partners which include agents, brokers, and dealers.
Digit Insurance previously raised $44m in 2018 from Fairfax Holdings.
Vivriti Capital
Vivriti Capital, a digital marketplace which connects investors and companies, closed its Series B round earlier this year on $50m. The investment comes less than a year since its former round.
Its Series B round was led by LGT Lightstone.
The company closed its Series A in 2019, with the capital being supplied by Creation Investments. While the value of the deal was not disclosed, Vivriti has raised a total of $100m in equity since it was founded in 2017.
The new funding, which puts Vivriti’s total funding to $100m, was led by LGT Lightstone, according to a report from Deal Street Asia.
Vivriti offers an online marketplace which connects capital market investors with institutions, small businesses and individuals. The solution, CredAvenue, supports clients with their prospecting, evaluating, executing and monitoring debt, all from a single solution.
Fusion Microfinance
Micro lending platform Fusion Microfinance raised INR 500 Crore ($70.6m) in its funding round its closed this year. The round was backed by private equity firms Warburg Pincus and Creation Investments, according to a report from India Infoline.
With the fresh funds the company is looking to expand its distribution network across India, expand technology capabilities and boost its presence in the market.
“Fusion has been amongst the faster growing companies in the sector over the last few years and is committed to maintain a steady and sustainable pace at a much larger scale in the next 3-5 years,” Fusion Microfinance CEO and founder Devesh Sachdev told India Infoline. “Building forth on a strong operating platform and strategic initiatives, we are well placed to become a valued company in the financial inclusion space.”
The FinTech was founded in 2010 and supplies small business ranging between INR 12,000 ($129) and INR 50,000 ($706) on one- and two-year terms to consumers in India.
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