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Fintech M&A Activity Led By Lending Sector In 2023; Start-Up Incorporations Drop By 70% From 2021

OutlookIndia

OutlookIndia · 1y ago

Fintech M&A Activity Led By Lending Sector In 2023; Start-Up Incorporations Drop By 70% From 2021

Lending fintechs accounted for 30% of all fintech acquisitions in 2023, reflecting increased regulatory scrutiny in the lending sector. Payments and Wealthtech were the other sub-sectors that saw high acquisition activity. The lending sub-sector's surge in acquisitions aligns with the tightening regulations in the space. In total, there were around 30 acquisition deals in the Indian Fintech space in 2023. Additionally, there has been a 70% decline in the incorporation of new fintech start-ups. The majority of acquisitions were done by larger companies for product enhancement and expanding capabilities. The fintech sector heavily relies on venture capital backing for sustainability. In the global market, fintech companies raised $46 billion between Q3 2022 and Q3 2023, indicating a focus on business fundamentals.

Related News

M&A Deal Value In India Drops 27 Per Cent In 2023: Report

OutlookIndia

OutlookIndia · 1y ago

M&A Deal Value In India Drops 27 Per Cent In 2023: Report

M&A deal value in India dropped by 27% in 2023 to USD 136 billion, according to a report by Deloitte India. Despite global challenges like high-interest rates, economic uncertainty, and geopolitical risks, India's M&A landscape remained resilient in 2023. The report predicts a steady deals market in 2024, driven by the manufacturing sector, especially automotive and electric vehicles. The energy sector is expected to experience significant M&A activity due to the government's focus on clean energy. The financial services sector will see consolidation and responses to regulatory changes driving M&A, while private equity activity is projected to remain steady.

Fintech Dominates Secondary Transactions in 2023 and 2022, Followed by SaaS and E-commerce Peaks in 2021: Report

OutlookIndia

OutlookIndia · 1y ago

Fintech Dominates Secondary Transactions in 2023 and 2022, Followed by SaaS and E-commerce Peaks in 2021: Report

According to PrivateCircle's Indian Start-Ups Deal Report 2023, Fintech and SaaS witnessed the highest number of secondary transactions in both 2023 and 2022 in India. The report tracked 117 start-ups valued at $500 million or more and found that Fintech consistently provided exits to investors, while SaaS showed resilience in this aspect as well. The report also highlighted a drop in start-up funding, with a 62% decrease in primary funding in 2023 compared to the previous year. Despite the slowdown, venture capital funds have sufficient capital for investments, and activity is expected to pick up later in the year. Lenskart raised the largest funding round of $500 million.

M&As In Indian Startup Ecosystem Nosedive To All-Time Low

Inc42 · 8m ago

M&As In Indian Startup Ecosystem Nosedive To All-Time Low

The Indian startup ecosystem experienced a significant decline in mergers and acquisitions (M&As) in 2024, with only 71 deals, the lowest in a decade. Despite a 20% increase in funding to $12 billion, M&A activity fell over 40% from previous years, primarily due to high valuations and founders' reluctance to accept lower offers. The e-commerce sector saw the steepest drop, while enterprise tech retained the most deals. Experts predict a potential resurgence in M&A activity by mid-2025 as new-age tech companies go public.

Value of fintech-led businesses to rise to $400 billion by 2030: report

Economic Times

Economic Times · 1y ago

Value of fintech-led businesses to rise to $400 billion by 2030: report

A report by Elevation Capital projects the creation of about $400 billion worth of businesses in India's fintech sector over the next seven years, growing four times from current levels. The sector is expected to tap into a revenue pool of around $70 billion out of the overall financial services revenue pool of $620 billion by FY2030. The report highlights that India now has the world's third-largest fintech ecosystem, with over 9,000 fintech startups, following the US and UK. SME lending, retail lending, and fintech SaaS are identified as key innovation opportunities.

Value of fintech-led businesses to rise to $400 billion by 2030: report

Economic Times

Economic Times · 1y ago

Value of fintech-led businesses to rise to $400 billion by 2030: report

A report by Elevation Capital projects the creation of about $400 billion worth of businesses in India's fintech sector over the next seven years, growing four times from current levels. The sector is expected to tap into a revenue pool of around $70 billion out of the overall financial services revenue pool of $620 billion by FY2030. The report highlights that India now has the world's third-largest fintech ecosystem, with over 9,000 fintech startups, following the US and UK. SME lending, retail lending, and fintech SaaS are identified as key innovation opportunities.

Indian fintech sector sees bleak first half of 2023 as funding drops 67%

Economic Times

Economic Times · 2y ago

Indian fintech sector sees bleak first half of 2023 as funding drops 67%

The Indian fintech sector experienced a challenging first half of 2023, with a significant drop of 67% in funding. The slowdown in funding has impacted the growth and expansion of fintech startups in the country. The decline reflects the cautious investor sentiment and challenges faced by the industry during this period. In the first six months of 2023, Indian fintechs raised $1.4 billion, a significant drop from $4.3 billion in the same period last year.

Startup M&As hit 8-year low as cash crunch, funding winter continues to rattle Indian startup ecosystem

Inc42 · 1y ago

Startup M&As hit 8-year low as cash crunch, funding winter continues to rattle Indian startup ecosystem

The Indian startup ecosystem may experience another year of slow deal activity in 2024, following the abysmal funding performance of 2023. The number of mergers and acquisitions (M&As) almost halved to 123 in 2023 from 240 deals in 2022. Distress sales were a common occurrence, with many startups opting for consolidation deals as a survival tactic. Enterprise tech led the consolidation charge with 33 deals, followed by ecommerce and fintech. The falling interest rates and startup valuations, along with global uncertainties, may sustain a certain degree of deal activity despite the funding challenges.

Ecommerce M&As Slipped 125% YoY In H1 2024

Inc42 · 12m ago

Ecommerce M&As Slipped 125% YoY In H1 2024

In 2020, there were only nine ecommerce mergers and acquisitions (M&A) deals. However, this number skyrocketed to 54 in 2021. The trend continued in 2022 with 59 deals but dropped to 20 in 2023. This decline in M&A activity in the Indian startup space can be attributed to the decreasing funding trends. During times of high funding, many ecommerce companies adopted the Thrasio-style "house of brands" strategy to drive their growth.

M&A deals in India drop 10% to 793 in 2023: PwC report

Livemint

Livemint · 1y ago

M&A deals in India drop 10% to 793 in 2023: PwC report

In 2023, India experienced a decrease in merger and acquisition (M&A) deals compared to the previous year. A report by PwC India revealed a drop of 10% in the total number of deals and a 38% decline in the disclosed deal value. Domestic deals saw a decrease of 18%, while inbound deals showed a 14% increase. However, towards the end of the year, deal activity stabilized. The report also highlighted that private equity investments decreased by 36%, but the average investment size per deal increased. Despite the challenging environment, the report anticipates an upswing in deal activity in 2024.

India ranks third globally in fintech funding despite 33% lower infusion in 2024: Report

Economic Times

Economic Times · 7m ago

India ranks third globally in fintech funding despite 33% lower infusion in 2024: Report

India's fintech sector ranked third globally in 2024, receiving $1.9 billion despite a 33% decline from the previous year. Factors like slower demand and geopolitical issues contributed to reduced funding. The ecosystem, however, showed resilience with two new unicorns and eight IPOs. Digital lending led, accounting for 64% of funds. Late-stage funding fell by 42%. Overall, the sector demonstrated adaptability, with significant activity in second-half funding and notable acquisitions.

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