Indian fintechs raise USD 1.26 billion in second quarter

The upcoming Initial Public Offerings (IPOs) including that of Paytm and Policy Bazaar is set to further boost the prospects of India’s fintech industry.
For representational purpose. (Photo | PTI)
For representational purpose. (Photo | PTI)

BENGALURU: India’s vibrant financial technology ecosystem has pipped some fierce competitors including China in terms of funds-raise for Q2, 2021, according to a recent research by S&P Global Intelligence. India topped the fintech funding value at $1.26 billion across 54 deals for the quarter while China saw declining investments at $239.8 million, the report stated. Chinese government’s strict crackdown on private internet firms, which led to exodus of cash deployment from the country, has come to benefit the Indian firms.

Some of the largest deals in the Asia Pacific region were led by Indian companies including Merchants payments platform Pinelabs (which raised $285 million), SaaS platform Zeta ($250 million), credit card payment start-up CRED($215 million), payment gateway Razorpay ($160 million), and weatlth tech start-up Groww ($83 million).

How does India fare against China’s fintech scene?

The upcoming Initial Public Offerings (IPOs) including that of Paytm and Policy Bazaar is set to further boost the prospects of India’s fintech industry. Noida-based One 97 communications, parent firm of Paytm, has filed for $2.22-billion IPO whereas insurtech firm Policy Bazaar seeks to raise $809.4 million through an impending listing in October.

Meanwhile, Chinese fintech firms saw declining funding value and activity, attracting just $239.8 million across 16 deals in the second quarter, against $351.4 million across 21 deals in the previous quarter. Recent regulatory changes marring the listing prospects of Chinese tech companies may further weigh on fintech investments in the country going forward, Celeste Goh, Market Intelligence Analyst, wrote in a blog post. Experts see the investment trend in China’s fintech sector to reverse in upcoming quarters due to proposed easing of regulations.

Indians on acquisition spree

The free-flow of capital during H1, 2021 from private venture capital/ equity firms has given enough firepower to India’s major fintech firms for acquiring niche companies. Flush with fresh funds, the payment gateway acquired TERA Finlabs in July to scale up its lending business. Razorpay is also on a lookout for other acquisition in B2B SaaS companies with core competencies in accounting and expense management to strengthen its offerings.

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