Funding Fintech - Here Are India's Top Fintech Investors
As the fintech momentum continues in 2022, we look at the 10 Indian fintech startups that have raised the most funding. These have made notable strides over the past year, gaining financial support from prominent investors and witnessing substantial growth, and are worth keeping a close eye on. The global FinTech market is growing at 23.4 % per year. However, India remains an untapped market due to the lower penetration of financial services. According to the report, 14.6% of the Indian population remains unbanked compared to 6% in the US. Only 20% of the SMEs have credit access, while insurance and mutual fund penetration continues to be low.
These untapped opportunities combined with high internet penetration, expanding middle-income and high-income households, and favorable government initiatives create significant growth potential for Indian Fin Techs, especially across digital lending, insurance, and neo banking. Digital lending is expected to grow faster, with stricter regulations with an anticipated CAGR of approximately 33.5% by 2023, insurance with an expected CAGR of 12.5% by 2030, and neo banking with an anticipated CAGR of 50.4% by 2026.
The first quarter of 2022 saw 81 deals in the fintech sector, worth a collective $1.77 Bn. Compared to Q1 2021, the amount increased by 155% and was 45% higher than that in the preceding Q4 2021.
So far in 2022, there have been 160 fintech deals, which has seen fintech startups raise $3.47 Bn. This figure is more significant than the fintech funding amount in the entirety of 2020 and is almost 44% of the total funding in 2021.
Out of the 1,219 fintech funding deals from 2014 to June 25, 2022, 676 can be attributed to the top 30 investors in the space, or more than 55% of the total funding activity. Marquee investors such as Sequoia, Accel, Tiger Global, and Y Combinator are among the top 30 fintech investors in India, each of which has participated in 23 deals on an average. All these have not deterred some of the biggest names in the venture capital space from investing in Indian fintech startups. Look at some of the most prominent investors in the Indian fintech ecosystem.
The Top 10 Fintech Investors
Tiger Global Management
Tiger Global Management, also known as Tiger Global in short, is another US-based VC firm that invests heavily in Indian startups. The VC fund has invested in 46 fintech startup funding deals, while its total funding participation in India since 2014 stands at almost 200.
Founded in 2001 by Chase Coleman III in New York City, Tiger Global is one of the youngest marquee investors in the business. The VC firm focuses on startups in the US, India, and China, with minor investments across other regions. Some of its big-ticket fintech funding has been in IndMoney, CRED, Razorpay, Open Money, and slice.
According to a WSJ report, Tiger Global has closed its 15th fund, Tiger Global Private Investment Partners XV, at a mammoth $12.7 Bn.
Elevation Capital is an early-stage investor in India's consumer internet, B2B technology, and consumer brand companies.
Founded in 2002 by Ravi Adusumalli, Elevation Capital (formerly SAIF Partners) primarily participates in seed to Series A funding rounds of startups. It has invested about $2 Bn in more than 150 startups in India. The fund has been the first investor in market-leading companies like Paytm, Swiggy, Urban Company, Meesho, FirstCry, Acko, Rivigo, Nobroker.com, and ShareChat. Elevation Capital is seventh on the list of top fintech investors, with 30 fintech deals on its portfolio.
The US-based ecommerce and tech major is also one of the top investors in India’s fintech startup ecosystem. The company has participated in 14 fintech deals so far. In terms of overall participation in India’s startup ecosystem, it has 27 steals in its portfolio. Amazon has an India-focused $250 Mn fund called the Amazon Smbhav Venture Fund, allowing the ecommerce major to invest in SMBs and startups.
Founded in 1994 by Jeff Bezos, famously in his garage in Bellevue, Washington, Amazon is one of the world’s biggest companies, with a market cap of $1.17 Tn. At the same time, Amazon also invests in tech startups across the globe.
Amazon has been under fire for several reasons in India. Most recently, the ecommerce giant has been embroiled in a bitter legal spat with Future Retail, which has seen Amazon resort to publicly accusing the other parties of fraud. The next date for the hearing of the case in the Supreme Court is on June 28.
Quona is a fintech-focused, early-stage venture capital firm based in the US. It has participated in 10 fintech deals and 13 deals in India’s startup ecosystem.
Quona, founded in 2015 by Ganesh Rengaswamy, Jonathan Whittle, Miguel Herrera, and Monica Brand Engel, is the third VC firm with a woman founder on this list. Its portfolio in India includes ZestMoney, Fisdom, and Rupifi, among others.
Quona’s latest investment in India’s startup ecosystem was in January this year when it participated in the $60 Mn Series C round of agritech startup Arya. Ag.
Bengaluru-based 3one4 Capital is an early-stage venture capital firm that has invested in 17 fintech startups in the country. In all, 3One4 has invested in almost 90 startups in the country since 2015.
Founded in 2015 by founding partners Pranav Pai and Siddarth Pai, 3one4 Capital has invested in fintech startups like Jupiter, Open, India gold, and Pazcare. The VC firm targets early-stage startups and funds them during their early days.
It announced its most recent fund in 2020 – Fund III, worth $100 Mn. According to the VC firm’s website, it has committed funds worth $310 Mn.
The Mumbai-based seed and early-stage VC firm have invested in 19 fintech deals since March 2014. India Quotient has invested in 87 total sales in all.
Founded in 2012 by Madhukar Sinha and Anand Lunia, India Quotient’s portfolio includes the likes of Lendingkart, Vyapar, and LoanTap. The VC firm targets early and growth-stage startups across the country.
India Quotient announced its fourth fund in February 2021, with the VC firm targeting a corpus of $80 Mn. The Mumbai-based VC firm has since announced the closure of the fund at $64 Mn.
Having participated in 85 fintech funding deals since 2014, the US-based venture capital firm is one of the world's largest and most influential of its kind. The VC firm has invested in over 400 funding deals in India since 2014, making it one of the most prominent investors in India's startup ecosystem.
Sequoia, founded in 1972 by Don Valentine in Menlo Park, California, serves major startup hubs such as the US, Southeast Asia, India, China, and Israel. Some of its big-ticket fintech investments in India include BharatPe, CredAvenue, Khatabook, and Razorpay, among others.
The VC firm has recently come under fire for corporate governance issues at some of its portfolio startups, such as Zilingo, BharatPe and others. It recently closed its India and SEA fund worth $2.85 Bn, of which $2 Bn is for seed and growth-stage ventures in India.
Venture Catalysts & 9Unicorns
Based in India, Venture Catalysts and 9Unicorns are two of the most prolific investors in the fintech space in India. The VC firms have been a part of 40 fintech deals since 2014, having invested across 240 deals in India’s startup ecosystem.
Venture Catalysts and 9Unicorns, founded in 2016 and 2020, respectively, have the same leadership team – consisting of Dr. Apoorva Ranjan Sharma, Anil Jain, Anuj Golecha, and Gaurav Jain. The firms focus on early-stage startups in India. They have some marquee investments such as Junio, HomeCapital, Nupay, and Vested Finance.
In May, 9Unicorns closed its debut fund for the fifth time, having raised $100 Mn for the same. A month before, Inc42 had reported that Venture Catalysts was also increasing a similar amount.
Ribbit Capital is ninth on the list of top fintech investors, having participated in 28 fintech deals. Incidentally, all of the investments by the US-based VC firm in India have been in fintech startups only, with its first investment coming in PolicyBazaar in 2014.
The portfolio of Ribbit, founded in 2012, includes BharatPe, Razorpay, Groww, CRED, and CoinSwitch, among others.
Ribbit’s latest investment in India’s fintech scene occurred last year when it participated in the $50 Mn funding round of neo banking startup Fi.
Pravega Ventures, a Delhi-based private equity firm, has participated in 12 fintech funding rounds since 2017. In total, it has been a part of 18 funding deals across India’s startup ecosystem.
Founded in 2016 by Mukul Singhal, Rohit Jain, and Vinay Menon, Pravega Ventures aims to be the first institutional investor in a startup it is funding and looks for exits at later stages. It usually participates in seed or pre-Series A funding rounds.
The VC firm’s latest funding deal happened in September 2021, when it participated in ePayLater’s $10 Mn Series A funding round.