India’s Fintech Market To Reach $150 Bn Valuation By 2025: MoS Finance Pankaj Chaudhary

The Minister of State for Finance Pankaj Chaudhary has said India’s fintech market is expected to reach $150 Bn in valuation by 2025, attributing the same to the growth shown by India’s fintech startups.

Speaking at an industry event organised by ASSOCHAM, Chaudhary said that the industry has emerged as one of the country’s fastest-growing sectors.

The Minister said, “A majority of the Indian fintech startups are not even a decade old, but the progress and growth shown by these firms have been exponential over the past few years. Indian fintech market is expected to reach $150 Bn in valuation by 2025.”

He further noted that India’s adoption rate is 87%, much higher than the global average of 64%.

Speaking at the same event, Paytm vice president Dharmender Jhamb said smartphone penetration in the country has helped the industry grow rapidly.

He added that because of increasing smartphone penetration, the government’s digitisation goal will reach more than 3,000 cities in India by 2025.

According to an Inc42 report, India’s total fintech opportunity will reach $1.3 Tn by 2025, growing 220% from the current market size of $584 Bn. The fintech sector has more than 4,200 startups, of which more than 550 are funded startups.

Some of the biggest sub sectors within the industry include insurtech, lending tech, payments, investment tech and fintech SaaS. Among these three, insurtech is the fastest-growing fintech sub sector in terms of market opportunity, growing at a CAGR of 57%, followed by investment tech (44%) and fintech SaaS (40%).

Indian fintech startups have raised more than $22 Bn in funding since 2014. Currently, the landscape has 21 unicorns and 31 soonicorns, with a combined valuation of more than $74 Bn. 

Among the 21 unicorns minted, nine are payments unicorns (such as Paytm, BharatPe, PhonePe and Pine Labs), five are from investment tech (Zerodha, Groww) and three are from insurtech (Digit Insurance, Acko and Policybazaar).

However, in the quarter ended March 2022, Indian fintechs managed to only raise around $1.77 Bn in funding, almost 45% less than the $3.2 Bn raised in Q4 2021.

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