In 2023, the number of fintech startups incorporated in India decreased by 72.6% compared to 2021 and was 55.55% lower than in 2022, according to data from the mergers & acquisitions (M&A) deal-sourcing platform Growthpal. In 2023, 20 fintech startups were incorporated in India, a significant drop from the 73 and 45 startups incorporated in 2021 and 2022, respectively. However, this data does not account for startups with fewer than 10 employees or those without a website or LinkedIn page.
Maneesh Bhandari, founder and CEO of Growthpal, noted that in 2020 and 2021, both regulators and founders gained insights into the capabilities and limitations of emerging fintech products. However, the introduction of new regulations and compliance measures across industries has made it challenging to launch new fintech ventures.
The data also revealed that there were approximately 30 acquisition deals in the Indian fintech sector in 2023, compared to 37 and 29 deals in 2022 and 2021, respectively. Some notable deals in lending included Bridge2Capital’s acquisition by IIFL Finance, FinFort’s acquisition by Yubi, and ORO Wealth’s acquisition by InCred Capital, among others.
Of these 30 deals, the majority (20) were conducted by large companies with over 1,000 employees or funding exceeding $50 million. Six deals were made by companies with more than 500 employees and over $20 million in funding, while five were done by smaller companies.
Looking ahead to 2024, Bhandari highlighted that the dominant trends in the fintech industry will include the disruption by Artificial Intelligence (AI) in financial services, the growth of digital lending marketplaces through open banking and Application Programming Interfaces (APIs), and the increasing importance of sustainable solutions for fintech to address industry challenges and remain competitive.
