Q3 Fintech Report- State of Indian Fintech

INFOCUS CONSUMER LENDING
REPORT Q3 2023

India’s Digital Economy: Key Highlights
01
Fintech Market In India
02
Global Fintech Startup Ecosystem: India Vs The Us Vs China
03
India’s Fintech Landscape
04
Quarterly Funding Trends
Top Indian Fintech Subsectors In Q2 2023
Top Indian Fintech Startup Hubs In Q2 2023
Fintech M&As Trends
Notable Fintech Startup Investors In Q2 2023
Fintech Funding Trends
05
Consumer Lending Market Opportunity
Consumer Lending In India: A Landscape
India Vs Global Landscape
India’s Lendingtech Opportunity Across Age Groups
Consumer Lending In India: Core Segments & Offerings
Factors Fueling Rise Of Consumer Lending
Startup Funding Trends
InFocus: The Rise Of Consumer Lending Startups In India
06
Consumer Lending In India: A Sentiment Analysis
07
Fintech Startups’ Stock Performance
08
Fintech In India: Key Challenges
09

India To Have 900 Mn+ Active Internet Users By 2025
By 2025, 56% of all new internet users will be from rural areas, and 65% of new internet users will be female
2022
931 Mn+
759 Mn+
360 Mn+
399 Mn+
1.1 Bn+
900 Mn+
396 Mn+
504 Mn+
22%
52%
19%
10%
26%
Smartphone
users
Internet Penetration
(Active Users)
71%
Urban Internet Penetration
(Active Users)
$0.16
Cost Of 1GB
Internet
7K+
5G Enabled Indian
Cities/towns
395 Mn
Number Of Male
Internet Users
349 Mn
Number Of Female
Internet Users
Internet
users
Urban internet
users
Rural internet
users
2025 (E)
% Growth
(Absolute)
SOURCE: IAMAI, INC42 ANALYSIS

$2.1 Tn+
ESTIMATED MARKET
OPPORTUNITY (2030)
Total Addressable Market
Source: Inc42
Note: Fintech funding data for the US and China is sourced from Crunchbase
Number of fintech unicorns in China is taken from CFTE
Fintech Market In India: Key Highlights
Fintech Market In India: Key Highlights
18%
CAGR (2022 To 2030)
Lendingtech
Most Lucrative Fintech Sub-Sector
$270 Bn+
Lendingtech Market Size
$27 Bn+
VENTURE CAPITAL
1440+
Deal Count (2014 To Q2 2023)
4.2K+
Active Fintech Startups
700+
Funded Fintech Startups
23
UNICORNS & SOONICORNS
Number Of Fintech Unicorns
34
Number Of Fintech Soonicorns
$74 Bn+
Combined Valuation Of Fintech Unicorns
$12.7 Bn+
Combined Valuation Of Fintech Soonicorns
Total Funding (2014 To Q2 2023)

Fintech Revolution In India: A $2.1 Tn Market By 2030
MarketSize(2022)
Sector&Segments MarketSize(2030) CAGR(2022to2030) %ShareMarketSize(2030)
Overall Fintech Market
Lendingtech
Insurtech
Payments
Neobanking
Investment Tech
Fintech SaaS
$584 Bn+
$270 Bn+
$87 Bn+
$165 Bn+
$48 Bn+
$9.2 Bn+
$4.6 Bn+
$2.1 Tn+
$1.3 Tn+
$307 Bn+
$253 Bn+
$183 Bn+
$74 Bn+
$31 Bn+
18%
22%
17%
5%
18%
30%
27%
-
60%
14%
12%
9%
3%
1.5%
Source: Secondary Sources, Inc42 Calculations
Note: The total addressable market (TAM) shown above is calculated using a bottom-up approach for the overall fintech market size and top-down for the fintech segments mentioned
Lendingtech emerges as the most lucrative segment in the Indian fintech sector
© INC42 MEDIA | NOT FOR DISTRIBUTION / 5

Global Fintech Startup Ecosystem: India Vs The US Vs China
$25 Bn+
34%
23
$21.7 Mn+
Total Fintech Funding (2014-2022)
Startup Investment CAGR (2016-2022)
Number Of Fintech Unicorns
Average Ticket Size Of Fintech Deals In 2022
$241 Bn+
72%
132
$22 Mn+
$96 Bn+
12%
13
$29 Mn+
Source: Inc42

India’s Fintech Startup Landscape: Who’s Who In Subsectors
BANKING FINTECH SAAS INSURTECH INVESTMENT TECH LENDINGTECH PAYMENTS
Source: Inc42
Note: This is not an exhaustive list

India’s Fintech Landscape: Key Players
UNICORNS Total Unicorns: 23 Combined Valuation: $74 Bn+ Total Funding: $16 Bn Top Hub: Bengaluru
GROWTH STAGE Total Funded Startups: 243+ Total Funding: $9.3 Bn+ Top Hub: Bengaluru
SOONICORNS Total Soonicorns: 34 Combined Valuation: $12.7 Bn+ Total Funding: $5.5 Bn+ Top Hub: Bengaluru
Source: Inc42
Note: This is not an exhaustive list

Source: Inc42
Note: Bridge funding round not included in this analysis | Based on startup funding deals recorded between 2014 and Q2 2023
Indian Fintech Startups: Funding Pyramid
604+
458+
241+
1,440+
Growth Stage Funding $9.3 Bn+
Late Stage Funding $16 Bn+
Seed Stage Funding $1.2 Bn+
Total Funding $27 Bn+
Total Funding
No. Of Deals

Source: Inc42
Note: 2023 data is for the period between January 1 and August 31, 2023
$27 Bn+ Raised By Indian Fintech Startups Since 2014
Funding
Amount
($
Bn)
Deal
Count
0.0
10.0
20.0
30.0
0
500
1000
1500
2014 2015 2016 2017 2018 2019 2020 2021 2022 Upto Aug 2023
Funding Amount Deal Count

The State Of Fintech Funding In India
$1.2 Bn+
(-26% YoY)
(-64% YoY)
(+11% YoY)
(+83%YOY)
29+
10+
$44.5 Mn
(-87% YoY)
(-64% YoY)
(-50% YoY)
(-61% YoY)
$429 Mn+
31+
3+
$15.8 Mn
(-42% YoY)
(-49% YoY)
(+14% YoY)
(+9%)
$896 Mn+
39+
8+
$27 Mn
Total Funding
Funding Deals
Mergers & Acquisitions
Average Ticket Size
Q2 2023 Q1 2023 Q4 2022
Source: Inc42

Fintech Funding For Indian Startups Stumbles In Q2 2023
Funding deals recorded a 48% YoY decline In Q2 2023
Funding
Amount
($
Mn)
Deal
Count
0
1000
2000
3000
4000
0
25
50
75
100
Q
1
-
2
0
1
9
Q
2
-
2
0
1
9
Q
3
-
2
0
1
9
Q
4
-
2
0
1
9
Q
1
-
2
0
2
0
Q
2
-
2
0
2
0
Q
3
-
2
0
2
0
Q
4
-
2
0
2
0
Q
1
-
2
0
2
1
Q
2
-
2
0
2
1
Q
3
-
2
0
2
1
Q
4
-
2
0
2
1
Q
1
-
2
0
2
2
Q
2
-
2
0
2
2
Q
3
-
2
0
2
2
Q
4
-
2
0
2
2
Q
1
-
2
0
2
3
Q
2
-
2
0
2
3
Funding Amount Deal Count
Source: Inc42

Median Ticket Size For Fintech Deals Stood At $4.9 Mn In Q2 2023
0.0
2.0
4.0
6.0
8.0
10.0
12.0
Q
1
-
2
0
1
9
Q
2
-
2
0
1
9
Q
3
-
2
0
1
9
Q
4
-
2
0
1
9
Q
1
-
2
0
2
0
Q
2
-
2
0
2
0
Q
3
-
2
0
2
0
Q
4
-
2
0
2
0
Q
1
-
2
0
2
1
Q
2
-
2
0
2
1
Q
3
-
2
0
2
1
Q
4
-
2
0
2
1
Q
1
-
2
0
2
2
Q
2
-
2
0
2
2
Q
3
-
2
0
2
2
Q
4
-
2
0
2
2
Q
1
-
2
0
2
3
Q
2
-
2
0
2
3
Source: Inc42

More Than 50% Of Fintech Deals Valued Less Than $6 Mn In Q2 2023
Funding
Amount
($
Mn)
0
10
20
30
40
41
35
30
27
24 24
20 20
11
10
9
5 5 5 5
4 3
50
U
G
r
o
C
a
p
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a
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a
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a
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a
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s
a
k
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v
e
r
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s
t
F
l
e
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t
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i
r
o
X
F
l
o
w
S
c
a
p
i
a
K
a
r
m
a
L
i
f
e
R
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v
fi
n
C
a
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t
l
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B
A
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I
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H
o
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L
o
a
n
E
d
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F
u
n
d
F
u
n
d
l
y
.
a
i
Source: Inc42
Note: Any deal with value above $20 Mn and less then $1 Mn is considered outlier

Others
2.6%
Investment Tech
2.6%
Fintech SaaS
5.4%
Banking
22.3%
Lendingtech
65.2%
Lendingtech Most Funded Fintech Sub Sectors In Q2 2023
Source: Inc42
584
200
48
24
23
$896 Mn+
Total Funding

Lendingtech
38.5%
Banking
5.1%
Others
12.8%
Payments
12.8%
Investment Tech
7.7%
Fintech SaaS
23.1%
Lendingtech Leads Fintech Sub-Sectors In Deal Count For Q2 2023
Source: Inc42
39+
Deal Count
15
2
9
3
5
5

Fintech Funding In Q2 2023 – A Stage Wise Outlook
Funding
Amount
($
Mn)
0
250
500
750
1000
Late Stage Growth Stage Bridge Stage Seed Stage
Q2-2022 Q2- 2023
-66% YoY +15% YoY
-33% YoY
-61% YoY
Source: Inc42

Fintech Funding In Q2 2023 – A Stage Wise Outlook
Deal
Count
0
10
20
30
40
Late Stage Growth Stage Bridge Stage Seed Stage
Q2-2022 Q2- 2023
-46% YoY
-3.4x YoY
-13% YoY
-44% YoY
Source: Inc42

Bengaluru And Delhi NCR Topped The Fintech Funding Charts In Q2 2023
Deal Count
Bengaluru
Delhi NCR
Mumbai
Others
0 5 10 15
Funding Amount ($ Mn)
Delhi NCR
Bengaluru
Mumbai
Others
0 100 200 300 400 500
Source: Inc42

Face-Off In Exits Through M&A Continues
M&A in fintech sector reported an 2.6x increase from the lowest value in Q2 2020
0
2
4
6
8
10
Q
1
-
2
0
1
9
Q
2
-
2
0
1
9
Q
3
-
2
0
1
9
Q
4
-
2
0
1
9
Q
1
-
2
0
2
0
Q
2
-
2
0
2
0
Q
3
-
2
0
2
0
Q
4
-
2
0
2
0
Q
1
-
2
0
2
1
Q
2
-
2
0
2
1
Q
3
-
2
0
2
1
Q
4
-
2
0
2
1
Q
1
-
2
0
2
2
Q
2
-
2
0
2
2
Q
3
-
2
0
2
2
Q
4
-
2
0
2
2
Q
1
-
2
0
2
3
Q
2
-
2
0
2
3
Source: Inc42

Active Indian Fintech Investors In Q2 2023
Kunal Shah
Startups
Investor
Source: Inc42
Note: This is not an exhaustive list | Investors who participated in most number of fintech funding deals have been included in this analysis. This list is not a ranking of any kind.

InFocus
The Rise Of Consumer Lending
Startups In India

Digital Consumer Lending: A $720 Bn+ Opportunity In India By 2030
Consumer lending market to grow at 22% CAGR between 2023 to 2030
Consumer
Lending
Market
Opportunity
($
Bn)
0
200
400
600
800
2023 2030
22% CAGR
2022 To 2030

Digital Consumer Lending Landscape
Personal Loan BNPL Gold Loan Retail Cards
Source: Inc42
Note: Players included in the landscape are not pure play in nature | This is not an exhaustive list

Global Lendingtech Ecosystem: India Vs The USA Vs The UK Vs The Germany
Total Lending Market In 2022
Estimated Percentage Growth In
Digital Lending (CAGR)
Estimated Number Of Users In
Digital Payments By 2027
Total Funding (2014 To 2022)
$217.5 Bn
22%
1082 Mn
$7.4 Bn
$11.8 Tn
26%
320 Mn
$51 Bn
$2 Tn
28%
65 Mn
$14 Bn
$7.6 Tn
12.4%
70 Mn
$4 Bn
India UK
USA GERMANY
Source: Statista, Inc42 Analysis, Secondary Sources

How Digital Consumer Lending Works In India
India Stack: End to End Digital Lending Now a Reality
CONSUMER LENDING END-TO-END DIGITAL EXAMPLE
Customer Requests for financing
Customer requests for
a retail loan
Basic info and eKYC
Digital data capture; Aadhaar
number triggers eKYC
Credit bureau check
Presence-less Layer
Cashless Layer
Paperless Layer
Consent Layer
Automated check of customer
credit behavior
Online fee collection
Automated calculation and
collection of fees ( bank, credit card)
Automated sanction
Automated rules check using
customer and external data
Ecosystem data
Addnl. detail from ecosystem
(e.g., income surrogate data)
Digital disbursement details
Disbursement docs digitally
generated
Digital signature & stamping
Customer digitally sing; digital
stamping of documets
Instant disbursement
Funds disbursed instantly
to account
INDIA STACK
(30 second sanction and immediate disbursement)
Source: BCG

India’s Lendingtech Opportunity Across Age Groups
18 to 24
25 to 34
35 to 44
45 to 54
55 to 64
Above 65 years
250 Mn (17.78%)
233 Mn (16.55%)
202 Mn (14.34%)
154 Mn (10.97%)
113 Mn (8.00%)
98 Mn (6.97%)
Total Population
BNPL, Instant Loans
BNPL, Supply Chain Financing Invoice Financing, Corporate Cards,
Line Of Credit, SMB Lending, P2P, Instant Loans
Supply Chain Financing, Invoice Financing, Secured Lending, Corporate Cards,
SMB Lending
Secured Lending, Corporate Cards
Secured Lending
BNPL, Supply Chain Financing, Invoice Financing, Secured Lending,
Corporate Cards, Line Of Credit, Smb Lending, P2P, Instant Loans, SMB Lending
Ideal Digital Lending Products
Age Groups
(Digital Lending Consumers)
Source: Inc42 and multiple secondary sources

Digital Lending In India: Key Segments By Market Share
Personal loans have the highest market share in both volume and value
Apr’20- sep’20
1%
2%
6%
0%
2% 2%
0%
3%
1%
27%
9%
40%
24%
10%
27%
45%
17%
8% 9%
17%
66%
91%
% Market Share (by Volume) % Market Share (by Value)
95% 96%
Apr’21- sep’21
Business Loan
Apr’22- sep’22 Apr’20- sep’20 Apr’21- sep’21 Apr’22- sep’22
Consumer Loan Personal Loan Other Products
Source: Equifax

Digital Lending In India: Key Segments By Average Ticket Size
Apr’20- sep’20 Apr’21- sep’21 Apr’22- sep’22
8,36,285
29,694
7,105
61,399
5,22,924
47,154
7,821
156,055
4,78,118
57,528
7,094
185,786
Business Loan Consumer Loan Personal Loan Other Products
Average
Ticket
Size
Of
Loan
Source: Equifax

Factors Fueling The Growth Of Digital Consumer Lending In India
Internet Penetration At 48.7% In The Country
173 Mn Households To Have Annual Income
Above INR 5 Lakhs By 2030
As Of July 2022, 78 Mn Credit Cards
In Circulation
Over 100 Funded Consumer Lending
Startups In India
Indian Consumer Lending Startups Have
Raised More Than $3 Bn From 2014 To Q2 2022
Lending Market In India Saw A 19.7% Growth
Rate In August 2023
Source: Inc42, Multiple Secondary Sources

Majority Personal Loans Disbursed In FY22 Were Under INR 1 Lakh
Percentage
Of
Originations
Volume
(Ticket
Size)
0%
25%
50%
75%
100%
FY18 FY19 FY20 FY21 FY22
10 Lakh+ 5 Lakh- 10 Lakh 2 Lakh- 5 Lakh 1 Lakh-2 Lakh <1 Lakh
Source: CRIF

Majority Of FY22 Personal Loans Valued Between INR 5 Lakh And INR 10 Lakh
Percentage
Of
Originations
Value
(Ticket
Size)
0%
25%
50%
75%
100%
FY18 FY19 FY20 FY21 FY22
10 Lakh+ 5 Lakh- 10 Lakh 2 Lakh- 5 Lakh 1 Lakh-2 Lakh <1 Lakh
Source: CRIF

$3 Bn+ Raised By Digital Consumer Lending Startups In India Since 2014
Funding
Amount
($
Mn)
0
1000
2000
3000
4000
2014 2015 2016 2017 2018 2019 2020 2021 2022 H1 2023
Source: Inc42

The Covid Booster Shot For Indian Digital Consumer Lending Startups
Consumer lending is growing at 73% CAGR from 2014 to 2022
Funding
Amount
($
Mn)
0
250
500
750
1000
1250
2014 2015 2016 2017 2018 2019 2020 2021 2022
Consumer Lending B2B Lending
Source: Inc42

Indian Digital Consumer Lending Startups Saw Massive Surge In Deal Count
Post 2020
Deal
Count
0
10
20
30
40
50
2014 2016 2018 2020 2022
Consumer Lending B2B Lending
Source: Inc42

Retail
Cards
8.8%
BNPL
8.8%
Gold
Loan
0.2%
Personal Loan Startups Dominate The Funding Amount And Deals Chart
158
2,868
292
Personal
Loan
86.3%
$3 Bn+
Consumer Lending
Funding Amount
Since 2014
225+
Consumer Lending
Deal Count
Since 2014
16
196
11
Retail Cards
4.9%
Personal Loan
86.7%
BNPL
7.1%
Gold Loan
1.3%
Source: Inc42

Investors Backing Digital Consumer Lending In India
Rupeek, OneCard, Eduvanz Financing
Aerem,SlicePay
Avanti Finance,Rupeek, Streamsource
Eduvanz Financing,Kissht, SlicePay
LoanTap, Propelld, Upwards Fintech
ePayLater, FlexMoney, MyShubhLife
Indiagold, PaySense
Liquiloans, BASIC Home Loan, HomeCapital
SlicePay,Indiagold, PaySense
Finomena, OneCard, ItzCash
SlicePay, Easy
MyShubhLife, ShopSe
Startups
Investor
Source: Inc42

Consumer Lending In India:
A Sentiment Analysis
In Association with

BNPL Players: App Functionality Takes Center Stage
Top Priorities Of BNPL Customers Simpl Takes The Lead With Best App Experience
0
2
4
6
8
App Functionality Ease Of Process Loan Detail Offers And Discounts App Experience (1- 10 Scale)
Simpl
lazypay
Paytm Postpaid
Ola Money
Postpaid
0 2 4 6 8 10
The graph presented below are based on a Likert scale of 1 to 10. A
rating below 5 indicates dissatisfaction among consumers, while a
rating of 6 and above signifies positive customer sentiment.
Source: Clootrack, Inc42
Note: Based on 92K+ user reviews from app store, play store and Trust Pilot | All players included are not pure play BNPL | 10 BNPL players were part of the sentiment analysis but data of six was not unavailable.
Customer
Delighters
(1-10
Scale)

For BNPL Users, Customer Care Tops The List Of Concerns
What Matters For Customers?
Paytm Postpaid’s Customer Service
Deemed The Least Satisfactory
0
2
4
6
8
Customer
Care Service
Charges And
Fee
Fraud And
False Promise
Payment
Option
Loan Limit
Customer Care Service (1- 10 Scale)
Simpl
lazypay
Flipkart Paylater
Ola Money
Postpaid
Paytm Postpaid
0 1 2 3 4
Note: Based on 92K+ user reviews from app store, play store and Trust Pilot | All players included are not pure play BNPL | 10 BNPL players were part of the sentiment analysis
but data of six was not unavailable | Fraud and false promise include: fraudulent activity, fraud application, money scam
Customer
Concerns
(1-10
Scale)
Many BNPL providers struggle to provide transparent, swift, and
user-friendly customer support for users seeking assistance. The graph
displayed below uses a Likert scale ranging from 1 to 10, with 1 being the
lowest and 10 the highest perception during the sentiment analysis. A
score below 5 indicates consumer dissatisfaction.

User Sentiment Analysis: Ola Money Postpaid Least Favoured In Terms Of
Charges & Fees
The graph below is based on a Likert scale of 1 to 10, with 1 representing the lowest perception and 10 being the
highest. A score below 5 indicates consumer dissatisfaction. Notably, no player surpasses a score of 5 in the
sentiment analysis.
Charges And Fee (1- 10 Scale)
Simpl
lazypay
Paytm Postpaid
Ola Money Postpaid
0 1 2 3 4 5
Note: Based on 92K+ user reviews from app store, play store and Trust Pilot | All players included are not pure play BNPL | 10 BNPL players were part of the sentiment analysis
but data of six was not unavailable | Fraud and false promise include: fraudulent activity, fraud application, money scam

Digital Gold Players: What Customers Want The Most?
Ease Of Process No.1 Priority For Customers Rupeek Ranks No. 1 In Ease Of Accessing Gold Loans
The graph below is based on a Likert scale of 1 to 10, with 1
representing the lowest perception and 10 being the highest.
A score below 5 indicates consumer dissatisfaction.
0
2
4
6
8
Ease Of
Process
Loan Details Customer Care
Services
User Interface
Ease Of Process (1- 10 Scale)
Rupeek
Muthoot
Finance
Loan Tap
BharatPe
0 2 4 6 8 10
Note: Based On 15K+ user reviews from app store, play store and mouthshut | All players included are not pure play digital gold loan providers
Customer
Delighters
(1-10
Scale)

The graph below is based on a Likert scale of 1 to 10, with 1
representing the lowest perception and 10 being the highest.
A score below 5 indicates consumer dissatisfaction
Digital Gold Players: What Customers Want The Most?
Digital Gold Loans Users Choose App
Functionality Over Charges & Fee
Rupeek Ranks No. 1 In App Functionality
For Digital Gold Loan Users
0
2
4
6
8
App
Functionality
Fraud And
False
Promise
Interest Rate Payment
Method
Charges And
Fee
App Functionality (1- 10 Scale)
Rupeek
Loan Tap
Muthoot Finance
BharatPe
0 2 4 6 8 10
Note: Based On 15K+ user reviews from app store, play store and mouthshut | All players included are not pure play digital gold loan providers
Customer
Concerns
(1-10
Scale)

Digital Personal Loans Startups Outpace Traditional Players In Ease Of Process
The graph displayed below uses a Likert scale ranging from 1 to 10, with 1 being the lowest and 10 the highest
perception during the sentiment analysis. A score below 5 indicates consumer dissatisfaction.
Ease Of Process (1- 10 Scale)
Zenda
Upwards Fintech
Smartcoin
Rupeek
True Credits
Rupeeredee
Canara Bank
Stashfin
Slice
Indusin Bank
Union Bank
0 2 4 6 8 10
Note: Based On 42K+ user reviews from app store, play store ,Trust Pilot, mouthshut | All players included are not pure play loan providers

Quicker Approvals, Faster Processing: The Digital Loan Apps' Edge
The loan details, which encompass instant approval, processing time, and loan services, offer a distinct advantage to
the digital personal loan ecosystem, making them highly beneficial for customers.
0
2
4
6
8
Loan Details Ease Of Process App Functionality
Customer
Delighters
(1-10
Scale)

Digital Loan Startups Surpass Conventional Players In Speed And Approvals
highest. A score below 5 indicates consumer dissatisfaction.
Loan Details (1- 10 Scale)
Upwards Fintech
True Credits
Rupeek
Smartcoin
Rupeeredee
Stashfin
Slice
Indusind bank
Canara Bank
Union Bank
0 2 4 6 8 10

For Digital Loan Users, Superior Service Takes The Front Seat
The primary concern for digital personal loan customers is an effective, transparent, and prompt customer care service
0
2
4
6
8
Customer Care Service Interest Rate Charges And Fee Fraud And False Promise Credit Score
Customer
Concerns
(1-10
Scale)

Digital Personal Loan Users Cite Poor Customer Care As Top Concern
Customer Care Service (1- 10 Scale)
Zenda
Canara Bank
Rupeek
Upwards Fintech
True Credits
Stashfin
HDFC Bank
Bank Of Baroda
Axis Bank
Supermoney
0 2 4 6 8 10

Digital Loan Startups Have Better Interest Rates Compared To Conventional
Players
Interest Rate Sentiment (1- 10 Scale)
Upwards
Fintech
Smartcoin
Rupeek
Indusin Bank
True Credits
Slice
Rupeeredee
0 2 4 6 8 10

Listed Fintech Startups’ Stock Continue Positive Momentum
₹864.00
₹761.00
+₹175.40
+₹270.60
25.47%
55.18%
₹310.95 +₹101.80 48.67%
LTP (YTD) Price diff. (YTD) % change
OCT 2022
-40%
-20%
0%
20%
40%
60%
80%
JAN 2023 FEB 2023 MAY 2023 JUN 2023 AUG 2023
Source: NSE, Inc42
Note: Latest stock market data as on October 4th, 2023
Percentage
Change
In
Stock
Price

Fintech In India: Key Challenges
Fraudulent Activities
The rising incidence of fraudulent activities and deceptive schemes poses a significant risk to India's burgeoning fintech sector. As digital transactions
become increasingly prevalent, malevolent actors continually devise new ways to exploit vulnerabilities in the system. This emphasises the immediate
need for robust security protocols and vigilant oversight within the fintech landscape to safeguard both consumers and the credibility of digital
financial operations.
Technological Disparities Between Legacy Financial Institutions And Fintechs
Traditional financial institutions such as banks often have outdated technology infrastructures that may not seamlessly integrate with modern digital
lending platforms. This disconnect impedes the efficacy of partnerships between digital lenders and conventional financial systems, reducing
financial inclusivity and affecting profitability.
Building Consumer Trust and Increasing Awareness
Fintech startups, particularly those in the realm of digital lending, encounter challenges in securing consumer trust, notably in Tier 2 locations and
beyond. Public unfamiliarity with digital financial services and a preference for face-to-face interactions have compelled fintech firms to adopt an
omnichannel strategy.
Escalating Customer Acquisition Costs
Heightened competition within the fintech sector has led to an increase in marketing expenditures aimed at attracting new customers. Such increased
outlays contribute to cash burn and adversely affect a company's bottom line.
Attracting and Retaining Skilled Talent
The rapid expansion in fintech has given rise to a growing demand for professionals with specialist skills in areas such as data analytics, financial
services, and software development. The industry requires a highly-skilled workforce for both innovation and effective execution to transpire.
Source: Inc42

Methodology
Inc42 Fintech Sub Sector Segmentation:
Funding data is for the period between 2014 and Q2 2023
Seed stage: Startup at angel or seed stage
Growth stage: Startups at Series A and B funding stage
Late stage: Startups at Series C or above funding stage
Bridge funding: Connecting funding rounds (in this case primarily Pre Series A & B)
Unicorn refers to any digital / tech company valued at or above $1 Bn (we also include companies which have ever received $1 Bn valuation, even if they lost the unicorn
status later)
A soonicorn is any public or private digital/tech company valued at or above $200 Mn.
Data in some sub sectors may differ from previous reports because our sector thesis was updated in 2023
Insurtech: Technology-driven innovation in the insurance industry.
Banking: Financial services provided by fintech startups
Payments: Systems and solutions for facilitating financial transactions.
Lendingtech: Technological advancements in lending and borrowing processes.
Investment Tech: Technology applied to investment and wealth management.
Fintech SaaS: Fintech solutions offered as Software as a Service (SaaS).
Crowdfunding: Raising funds from a large number of people, often via online platforms.
Source: Inc42
Calculating the Total Addressable Market (TAM) for LendingTech involves a multi-faceted analysis. Firstly, the anticipation that the overall LendingTech market will expand
to $1.3 trillion by 2030 signals a substantial market opportunity. This projection reflects several factors, including the surging growth in consumer lending, which holds
immense potential. Specifically, the growing consumer lending sector in India, driven by increasing consumer penetration, contributes significantly to this outlook.
Furthermore, the estimate that consumer lending is set to capture 55% of the entire lending market by 2030, equivalent to $720 billion, highlights its dominant role within the
industry. Notably, the current landscape reveals that personal loans already constitute 66% of all loans, underscoring the existing traction in this segment. Consequently,
when calculating TAM for LendingTech, we consider these elements in tandem, acknowledging the substantial and expanding market opportunity driven by the growth and
dominance of consumer lending.

www.inc42.com
Contact: editor@inc42.com
Inc42 is India’s largest tech media & information platform on a mission
to build & serve India’s tech, startup & internet economy.
From breaking the latest news to discovering the hottest startups, from
spotting upcoming trends to simplifying complex concepts, we cover
everything tech in India’s internet economy.
Born in January 2015, Inc42 has become the leading source for news &
analysis on India’s rapidly growing tech, startup & internet economy.
Inc42, with over 35,000+ published stories, 80+ research reports, 120+
conferences & events & having featured 1000s of entrepreneurs, now
reaches over 25 Mn+ tech leaders & professionals every month.
SAIFLAN AIJAZ
ANALYST
Inc42 Media, 59/16, 4th Floor, Jujhar Tower,
RD Marg, Kalkaji, New Delhi, Delhi 110019
ADDRESS
MEHA AGARWAL
EDITOR
SABITH
DESIGN

DISCLAIMER
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report is accurate and free from any discrepancies. Ideope Media Pvt Ltd, the parent company of Inc42 Media and Inc42 DataLabs, is not responsible for any
inaccuracy in the information presented or for any damages caused by the use of information provided in this report. In case of any discrepancy or errors in the
data, you can contact us at editor@inc42.com and we will try our best to update the information in the digital version of the report. We are constantly updating
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The views and opinions in this report should not be viewed as professional advice with respect to your business.

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