#Dealflow can barely keep up with the flood of interest in financial technology startups in India.
“India offers the highest expected return on investment on fintech projects,” with returns of 29% versus a global average of 20%, according to a report from PwC and Startupbootcamp.
Driving the action are greater openness among regulators for non-banks, Prime Minister Modi’s “demonetization” strategy and demand from e-payment companies like PayPal, Amazon and Paytm for new markets (Amazon, it seems, is taking advantage of all three trends.) Personal finance, peer-to-peer lending and micro-financing are all enticing investors; nearly all promise proprietary technology.
Here is just some of the action so far this year:
- Personal finance: Peer-to-peer lender AnyTimeLoan landed $2 million. EarlySalary raised $15.6 million for app-based payday loans. Savings app Balance Technology was selected for YES BANK’s fintech accelerator.
- Small business and microfinance: Lendingkart raised $3.8 million for small-business lending. Microfinance firm Spandana Sphoorty secured $63 million in debt funding. Ess Kay Fincorp closed $32 million for small-business and vehicle financing in rural and near-urban areas.
State Bank of India backs small-business lender Lendingkart
- Digital and mobile payments: Razorpay, which sells online-payment software, raised $20 million to help businesses manage digital payments. Mobile-payment company Dov-E was also selected for YES FINTECH.
- Financial efficiency: PhonePe is expanding into insurance and mutual products for financial-services firms. Moneytor received seed funding to automate debt collection. Investors poured $13.2 million in payroll and employee benefits management startup NiYO. FinBit, whose software helps underwriters analyze bank statements, and Fyle, which automates business-expense management, also joined YES FINTECH accelerator.