2023 saw 72% drop in Indian fintech startups incorporation: Report

• ByStartupStory     |    February 21, 2024

In 2023, fintech startup incorporations in India plummeted by 72.6% compared to 2021 and 55.55% compared to 2022, as per data from Growthpal. Only 20 startups were incorporated in 2023, a stark contrast to 73 in 2021 and 45 in 2022, with the caveat that smaller startups may not be represented. Maneesh Bhandari, founder and CEO at Growthpal, noted, “During 2020 and 2021, both regulators and founders gained insights into the capabilities and limitations of emerging fintech products.” He continued, “However, the subsequent introduction of new regulations and compliance measures across industries has created a challenging environment for launching new fintech ventures.”

Furthermore, the data revealed a decline in acquisition deals in the Indian fintech sector, with around 30 deals in 2023 compared to 37 in 2022 and 29 in 2021. Significant acquisitions included Bridge2Capital by IIFL Finance, FinFort by Yubi, and ORO Wealth by InCred Capital. Bhandari highlighted that the majority of these deals (20) were executed by large companies with over 1,000 employees or funding exceeding $50 million, with six by firms with more than 500 workers and $20 million in funding, and five by smaller companies.

Looking ahead to 2024, Bhandari emphasized upcoming trends in fintech, stating, “In 2024, the trends that will dominate the fintech place include disruption by Artificial Intelligence (AI) in financial services, the rise of digital lending marketplaces through open banking and Application Programming Interface, and the increasing significance of sustainable solutions for fintech to address industry challenges and remain competitive.”

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