India pulls out $1.93 billion in fintech investments in Q3; Top of APAC: S&P

India pulls out $1.93 billion in fintech investments in Q3; Top of APAC: S&P

A note by S&P Global Market Intelligence shows that India continues to lead the way in fintech investments in the Asia-Pacific (APAC) region, raising $1.93 billion in 66 deals in the third quarter of 2021.

Overall, investments in Asian fintech companies grew 68 percent sequentially to $5.47 billion in the third quarter, marking a new quarterly high since the first quarter of 2019 (Q1-2019). Transaction volume also increased by 21 per cent to 216 transactions, the report said. see graph here

According to the note, the increase in investment in fintech companies in the APAC region was primarily due to an increase in the number of transactions to $100 million in size. The valuations have also risen along with the move towards digital channels, which may be driven by better fundamentals to some extent, the report said.

“However, this may also reflect the willingness of private investors to pay higher multiples due to their boom in the fintech sector. That said, the newly-listed APAC-based fintechs have so far received a positive response from the public markets, Which could encourage more fintech investment in the region. In particular, we expect Southeast Asia-based fintechs to attract more capital as venture capitalists raise fresh money to double technology investments in the region, said Celeste Goh, fintech analyst at S&P Global Market Intelligence.

Meanwhile, fintech investments in Southeast Asia more than doubled to $1.90 billion on a quarter-on-quarter basis, while deal volume rose 32 percent to 62 deals, according to a note by S&P Global Market Intelligence.

“Consumer-facing payments apps have dominated funding in the payments sector in the past, but business-to-business payments fintechs have been attracting more investor attention of late,” the note said.

Going forward, experts see the fintech landscape in India changing rapidly as the digitization of clients and merchants opens up new possibilities of providing financial services for the players.

According to an antique stock broking note, adoption of digital payments, which is 1 per cent CAGR in value but 45 per cent CAGR in value in FY18-21, shows high use cases and several insights into spending behaviour/need can provide. Cash flows of a consumer and merchants that would otherwise have been difficult to estimate based on document filings.

“Established players will continue to be key players in the near term, especially in terms of bank deposit creation and lending and we expect a lot of partnerships to emerge. New solutions such as Buy Now, Pay Later (BNPL), SMEs The financing will have passed the proof of concept stage, leveraging a huge merchant base and developing some regulatory oversight. This will only intensify the competitive landscape and over time, a new financial system will emerge and be (stronger) more There may be no (marginalized) players,” said the Antique report. View the Fintech Landscape

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