The Dialogue by Inc42 features in-depth discussions on topics and themes that matter most for the Indian startup ecosystem
Inc42 has partnered with Onfido to unearth the sectoral trends and how startups across domains are looking at cybersecurity
The three-part series will focus on fintech, gaming and transport tech
The year 2021 has brought forth a new set of trends, challenges and opportunities for the Indian startup ecosystem. On the one hand, by mid-April alone, six Indian startups raised $1.55 Bn, thus minting as many as 10 unicorns just four months into the year. On the other hand, the second wave of the Covid-19 pandemic started sweeping the country from April onwards, and India went back to stringent lockdowns and curfews much like the year before.
Although some sectors such as ecommerce and fintech have not been as badly affected as others during the second wave, many businesses have to rework their priorities and operations in sync with the new realities. One such trend seen across the ecosystem is the implementation of cybersecurity measures, indeed a matter of paramount importance in a digital-first economy.
As part of our continuous effort to keep you updated on how the startup ecosystem is evolving, Inc42 has partnered with Onfido, a London-headquartered identity verification company, to deep-dive into the trends triggered by the pandemic, the impact of these trends and how homegrown startups are protecting their businesses and customers from the recent surge in frauds and cyberattacks.
Our series goes live on June 19, and here is a quick look at what’s coming
The Dialogue: Fintech, Gaming And Transport Tech
Startups Enabling The Fintech Revolution
In spite of the tragedy and the chaos, there is a silver lining — the pandemic has given the fintech sector a major boost. To start with, there has been a large-scale adoption of digital payments and financial services due to lockdowns and social distancing mandates. Better still, the country has seen massive interest from retail investors who have made good use of the time, technology and the vast range of services offered by the fintech startups. As of March 2020, India saw an 87% fintech adoption rate compared to the global average of 64%.
Fintech in India is one of the fastest-growing markets worldwide. Among the leading sub-segments is digital payments, with its total value rising from $65 Bn in 2019 to an estimated $140 Bn by 2023, growing at a CAGR of 20%, according to the 2020 McKinsey Global Payments Report.
Out of the 502 funding deals in the first five months of 2021, fintech has bagged 88 compared to 55 during the same time frame last year. The sector continues to lead the startup funding landscape, having raised more than $2 Bn in 2021 (till June). It is a 4x increase from $495 Mn in the first five months of 2020 and accounts for nearly 22% of the startup funding infused this year.
The Rise Of India’s Online Gaming Platforms
The onset of the pandemic in 2020 and the subsequent lockdowns proved to be a game-changer for India’s online gaming platforms. As people consumed more content and explored the sources of online entertainment, gaming platforms became popular and gained significant traction. By September 2020, India topped the list of countries with the most mobile game downloads. The number stood at 7.3 Bn, nearly 17% of worldwide downloads. The country is now home to more than 300 Mn gamers, according to industry estimates.
Inc42 Plus deep-dived into the gaming industry last year to find that the startups in this space had witnessed exponential growth. While Delhi-based WinZo saw a 30% surge in daily traffic from metros and Tier-1 cities, Ahmedabad-based GamerJi clocked a 2.5x rise in esports traffic.
The growth was further triggered by the India-China conflict that led to the blanket ban of more than 200 Chinese apps and opened up a huge opportunity for Indian players. Here is one case in point. According to California-based mobile marketing analytics company AppsFlyer, the installation volume of Indian apps grew by 39% in 2020.
According to industry estimates, India spent around $1.2 Bn on mobile games in 2020 (Jan-Dec).
The Future Of India’s Mobility Sector
Mobility was among the hardest-hit sectors during both waves of the pandemic. For instance, people were unable and unwilling to share cabs and bikes, and the financial crunch made it difficult for most consumers to buy their own vehicles.
The first set of difficulties for the segment resulted from fast-changing state regulations and a scarcity of drivers. Consequently, the ride-sharing businesses suffered a huge loss.
Despite these challenges, trends such as the growth of electric vehicles (EVs), coupled with the government’s push for local products and services, may help the sector revive soon. The ride-hailing market is projected to grow at a CAGR of 19.1%, from a total turnover of $26 Bn in 2020 to $52.5 Bn by 2024.
Working in association with Onfido, The Dialogue will unearth the recent developments and evolution of the sectors along with the challenges, the future outlook, opportunities and more.
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