Fintech Is A High-Interest Sector For Investors

Mohandas Pai at Inc42's Fintech Summit 2022: Fintech a high interest sector for investors

SUMMARY

“India is the perfect market for fintech and acceleration of fintech,” Pai said

He added: India’s fintech sector has not slowed down with Covid and has managed to capture mainstream investor interest

Pai also noted that India has seen growth in the number of startups in fintech over the last few years

Speaking at Inc42’s Fintech Summit, TV Mohandas Pai, chairman at Aarin Capital Partners, said that fintech in India remains a sector of high interest for investors.

Pai noted that India has seen explosive growth in the number of startup ventures in the space over the last few years, depicting an increasing entrepreneurial interest in the segment as well.

“India is the perfect market for fintech and acceleration of fintech,” Pai said, speaking of the multiple factors that make it a lucrative opportunity for investors to back startups in the sector.

Pai also added that India’s fintech sector has not slowed down with Covid and has managed to capture mainstream investor interest.

In his presentation, he noted that India has the world’s second-largest unbanked population, with 190 Mn people still without a bank account or access to other fintech products. Second, India also has only around 3.69% insurance penetration, almost half of the global average of 6.13%. Third, Indians invest very disproportionately in real estate and gold – only 5% of India’s total investment goes into financial markets.

He also noted that India’s fintech startups are looking at a large millennial demographic, with an increased tech-savviness, which can allow fintech startups to innovate further.

All of these factors, Pai noted, combine to make India’s fintech sector a segment which has attracted significant attention from investors. India’s fintech opportunity will rise to $1.3 Tn by 2025, according to an Inc42 report, which means that the sector will continue to attract investment.

That has been the case so far. In 2022, India’s fintech segment has attracted the most investment, with a whopping $3.4 Bn poured in across 159 deals in the country, as of June 30, 2022. The sector was the second-most funded in 2021, with almost $8 Bn in investments.

Over the last 18 months, the sector has attracted $11.4 Bn in funding. For context, India’s startup ecosystem attracted $11.8 Bn in funding in the entirety of 2020.