India Is Becoming the Fintech Hub of the World the Digital Fifth Fintech Report 2021

INDIA IS BECOMING THE FINTECH HUB OF THE WORLD THE DIGITAL FIFTH FINTECH REPORT 2021

THE DIGITAL FIFTH REPORT

Phone : +91 98671 67676 Email : [email protected] PAGE | 2

ABOUT US

Set up in 2017, we are India’s first Fintech consulting and advisory firm for Fintechs, Banks, NBFCs, Wealth Management, Mutual Fund and Insurance segments. We have been the go-to solution finders for established BFSI organizations and emerging game-changers alike.

While the Fintech landscape continues to evolve at a rapid pace, The Digital Fifth empowers businesses by providing them with tested as well as bespoke solutions for their digital evolution journey. A niche consulting firm, we focus on Digital Transformation, Fintech Training & Strategic Partnerships between start-ups and banks.

Our founders bring 50+ years of expertise in building & setting up Banks and driving transformation projects across US, Europe, Africa & Asia. OBJECTIVES – Changing the way money moves – Business and ecosystem impact – Creating measurable value – Celebrate clients’ success AREAS OF EXPERTISE – Digital Strategy for Banks, FIs and Fintechs – Business and technology advisory – Digital Program management – Open Banking & Innovation – Market Insights & reports – Deep industry connect – Cybersecurity

OUR SERVICES – Consulting - Business, Digital & Technology Strategy – Fintech Learning and development – Partnership - Go to market & ecosystem access – Investor matchmaking and fund raising EXPERIENCE – Setting up of Digital Banks – Building and Executing digital strategy – Execution of business and technology strategy for banks, NBFCs and Fintechs – Digital & technology program management – Client matchmaking for Fintechs – Security and Governance www.thedigitalfifth.com PAGE | 3

TABLE OF CONTENTS

India Is Becoming the Fintech Hub of the world 1

What is the best strategy for open banking and how to 12 implement it?

Comprehensive Funding Analysis 18

Top Open Banking Initiatives in the country 23

Big Techs and Open banking 31

Fintech Acquisitions - 2021 36

Key Regulatory Changes 38

Top 30 India Fintech Influencers 2021 39

Indian Fintech Landscape 2021 41

Indian Open banking Ecosystem 2021 43

Indian Digital Lending Ecosystem 2021 45

The Digital Fifth Fintech School 47

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INDIA IS BECOMING THE FINTECH HUB FOR THE WORLD

BANKING-AS-A SERVICE BECOMING SIGNIFICANT

With Banking-As-A-Service (or – Larger fintechs acquiring smaller Finance-As-A-Service) gaining banks significance, most prominent – Relationships expanding institutions will setup full scale units from Pure Sales to End to End for BaaS as well as Digital Banking Engagement with clear revenue and customer engagement targets. We believe – Newer and innovative that nearly 20 to 30 percent of overall monetization models revenues would migrate to these channels for Retail & MSME business – Building of newer products and in next 12 to 24 months from current services sub 5 percent numbers. – Deeper integrations This change will also be visible as INNOVATION MOVING FROM digitally savvy institutions will start FRONTEND TO BACKEND demonstrating better Cost Income Ratios along with P/E Ratios. A lot of early-stage innovation in India was focused on better COLLABORATION BETWEEN customer experience during Sales BANKS AND FINTECHS & Onboarding. This created space Collaboration frameworks between for investment in frontend apps banks and fintechs have matured with not-so-great delivery through over the last 3 years. Banks have archaic Backoffice processes. We started optimally using the fintech believe that during this year, the services in bi-directional way with focus will shift to strong and flexible the focus on key matrix like revenue backend platforms with integration increase, cost reduction, deeper capabilities & cloud readiness. customer engagement etc. During This would mean heavy investment the next year, we will see: in: – Banks investing or acquiring – Core Banking Platforms fintechs

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– Open Banking Systems monetization opportunities. the same services as for Retail They would find it challenging or Corporate Customers. – Digital Banking Systems to build business as they While all of them have current – Digital Lending Platforms would compete with larger accounts with banks, most All- In-One Apps (PayTM, are not serviced well through – Open Insurance Platforms PhonePe) as well as Digital branch as well as digital Banks (like Kotak and DBS). channels. – Payments Infrastructure Larger Retail Neobanks with The most critical needs of SME We believe that investments massive funding will do well customer includes invoicing, would soar in startups due to leadership quality, credit, liquidity management, focusing on these platforms. access to larger funds, and reconciliation, payment & OPEN BANKING ability to sustain growth. receivable management, STRATEGY which are not offered in a We believe that newer coherent way by banks. We Neobanks will come up with a Firms will create board have seen players like Open, sharper focus on approved Open Banking Vyapar, Ezo in India solving Strategy for partnering – Older customer base (say the real problems of the with the ecosystem. These 50 plus) customers in partnership strategies would be driven with banks. Players focusing by the Board and would be – Retirees on even smaller MSMEs like aligned with business as Khatabook, OKCredit have – Women well as digital strategy of the also made significant impact organization. – Specific Regions to the life of these customers. Open Banking Strategy would – Inclusion We believe that SME cover: Neobanks would continue These startups may have a – Business Model with to grow with more niches higher possibility of success monetization approach & coming up like as they will have a deeper operating model understanding of the – Exporters Open Banking Use cases customer segment, wider – – Importers product offerings, and lower Open Banking – competition. – Industry focused – say architecture steel, e-commerce We also believe that Retail merchants – Enterprise Architecture Neo-banking as a term will with middleware approach not be used for platforms that These startups would also & integration layer just have a “Decent App on face intense competition from RETAIL NEOBANKS Prepaid”. SME Neobank initiatives of SME NEOBANKS major banks like HDFC Bank, We see a different journey for ICICI Bank, SBI etc. Retail and SME Neobanks in SME banking has remained in Multiple startups would be India. Retail NeoBanks will doldrums due to lack of focus entering the market in next move from primarily “Youth of bankers on this “difficult” couple of years to tap different and Mass focused” to more customer base. They have segments of the market as differentiated segments. been offered services by a indicated above. Many of these new initiatives hybrid model, assuming that would close down due to a these are customer can use lack of differentiation and

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STARTUP ECOSYSTEM GETTING ENRICHED

NEXT YEAR WILL SEE for these players. Hopefully, competition. A HUGE INCREASE IN clear focus on maximizing INDIAN STARTUPS SETTING OF STARTUPS the offering for a customer base will help them in moving INITIATE THEIR Covid has adversely impacted toward scale and profitability. INTERNATIONAL the livelihood across all EXPANSION segments and levels. We MARKET GETTING With a lot of startups raising see many of these impacted READY FOR Series B or beyond funding, people to focus on building INTERNATIONAL they will look at international their own start-ups in 2021 as STARTUPS markets for expansion. We they see newer opportunities. In the last couple of years, believe that Middle East We believe that this year India has seen entry of many and South Asia would be may be biggest in terms of international startups, which the best market for Indian number of startups coming are in different stages of startups due to proximity as up. This trend is already expansion. However, many of well as similarity in market visible with a large number these players have closed their expectations. More than of industry seniors stepping business due to Covid related 10 startups in Payments out of their organizations challenges as well as due to / KYC / Regtech business for setting up their own lack of understanding of the will setup base in Middle businesses. market. East and will pave way for GOING WIDE ON bigger engagement in the We believe that Indian B2B PRODUCTS AND ecosystem. market is ripe for expansion SEGMENTS as banking sector is now South East Asia will be an area Most Fintechs started their exposed to value of fintechs of focus for startups in B2B journey by deeply focusing within India and has seen Lending / KYC / Regtech due on one product and segment. international startups in to potential of scale in the This established them as events across the world. We market. We have seen B2B a leader in their own areas will see entry of another 40 to startups like Perfios, Kuliza like Point of Sale, Payment 50 startups in the following making their presence felt in Gateway, Buy Now Pay Later, areas: these markets. Personal Loan products. – Core banking platforms US and Europe would become However, lack of scale and more relevant for Indian monetization opportunities – API Platforms startups in year 2023 and within these segments has beyond. This delay is linked to pushed all these players – Underwriting Platforms heavy investment required to in newer products and – Digital Engagement enter these markets and lack segments. Platforms of business experience of our startups in this geography. We will see a bit of – Wealth Platforms overlapping and confusing ecosystem now, with every – CRM Platforms player trying to add adjacent There may not be much value products or reach out to for international startups to newer segments. This would enter B2C business due to make it difficult to map the challenges with localizations competitors and would also as well as excessive affect the brand positioning www.thedigitalfifth.com PAGE | 7

COLLECTIONS AND PAYMENT

COLLECTION AS A embedded in the customer ecosystem through higher SEGMENT journeys (subscriptions) cost of implementation and instead of coming as a infrastructure. Collection business has separate friction step. always been intertwined Remittance business remains with Payment business and INDEPENDENT B2C largely inefficient and is still we have not seen innovative PAYMENT BUSINESS waiting for the emergence of collection offerings like UPI MODEL WILL REMAIN few large remittance players collect in the market. Entire EXCLUSIVE TO LARGE with a focus on high traffic lending industry is waiting STARTUPS (YES, SAME corridors. for newer solutions to come, AS WHAT WE HAD B2B PAYMENT which may be the coming PREDICTED LAST YEAR) SEGMENT WILL GO from either a large startup or As a payment product, UPI THROUGH EVOLUTION from New Umbrella Entity for will continue to scale with Retail Payments. B2B segment has done well more innovative use cases over last few years across This would help in coming in and will remain POS and Payment Gateway reimagining collections default payment gateway segments with leaders beyond Cheques and NACH for the country. While UPI building scalable business model, which are reflective of has enabled innovation models. This segment has previous physical era. These in payment space, it has primarily depended on solutions would solve for: resulted in larger players Merchant Discount Rate taking complete control of the (MDR) for their revenues. As – End to end Collections for market. With wallet business country continues to move Merchants / NBFCs etc. depleting and UPI getting towards lower MDR, payment aggregated with few players, – Logical Network level startups focusing on issuance there may not be many new Reconciliations side (where they share players entering this space. – Irregular amount / issuance fees with banks) as duration linked collections We believe that with the well as acquirer side would be (going beyond fixed potential entry of New adversely impacted. Umbrella Entity in Retail amount and fixed Almost all payment startups Payments, network level duration) have started offering other innovation may scale to financial products like We also believe that the next level. This may lending, wealth to make their collections would get fully adversely impact the banking business model viable. This

[email protected] PAGE | 8 movement will get intensified during next 12 to 24 months. Many of these platforms may also gravitate towards neo banking/ accounting segment.

B2B remittance business may have some players entering the segment, which has remained on “dated payment rails” due to lack of innovation and intent. Even now, the remittance cost is nearly 2 to 4% of amount based the payment corridor, thereby impacting SME exporters adversely.

LENDING, TRADE FINANCE AND BEYOND

INDIA WILL HAVE 5 TRADE FINANCE improve its trade processing DIGITAL LENDING STARTUPS WILL operations. UNICORNS IN THE NEXT EMERGE Indian banks will have 3 YEARS Trade finance has remained to partner with global Lending fintechs across an under penetrated area consortiums like Marco Polo, retail and sme segment have for fintechs due to inherent Voltron, Trade Information attracted a good chunk of complexity of the sector Network or with Indian funding over the last couple of requiring deep knowledge of consortium of Finacle years. Some of these startups business and compliance. We Trade Connect. There is are currently undergoing have not seen experts from limited possibility of any tough times due to changes these domain leaving their fintech player building the in ekyc processes, Covid high paying and secure jobs consortium ground-up as impact, liquidity crunch and to disrupt this segment. it would require immense NPAs. This segment has now capital as well as international There are multiple areas, reached a maturity stage with rollout. where fintechs can help in established ones expected to simplifying trade finance There may also be some grow well and capital deprived including: action in Treasury segment, ones either closing down or which is in complete slumber merging with banks / stronger – Replacing manual data as of now. fintechs. entry with data extraction and processing of trade WEALTHTECH GROWTH Successful startups in this documents WOULD CONTINUE TO segment have started BE A CHALLENGE 1. Entering offline business – Reducing the operational risks Indian Wealthtech / Robo 2. Offering newer lending Advisory has grown rather products and beyond – Applying trade regulations tepidly due to lack of real 3. Adding new segments – KYC business models as Indian customers do not tend to 4. Offering their platform as – AML pay for value added services SaaS around wealth. In addition, – Trade Embargoes 5. Applying for banking direct mutual funds have license Internationally, startups gained ground amongst 6. Becoming Neobanks focused on trade finance digitally savvy customers, like Traydstream, Coriolis, resulting in low or zero We believe that India would Intix, Tradeteq are helping revenues for mutual fund soon see multiple Digital in reducing risks and distributors. Lending Unicorns as stronger accelerating trade processes. Over next few years, most players continue to gain Yes Bank has recently wealthtechs will merge traction. partnered with Traydstream to with larger entities offering www.thedigitalfifth.com PAGE | 9 wide range of products and Fund, Stock and other related are doing well as they: services. These acquirers may services in partnership with – Have low cost of customer be from fintech ecosystem wealthtech platforms. acquisition (as customers or from financial services are already acquired) ecosystem. Unique revenue NEOENTRANTS / EMBEDDED FINANCE making startups like – Have deep insights on SmallCase would continue to Financial services are normally customers scale, which are not focused not the primary need of the – Can simplify customer purely on mutual fund customer and are always journeys distribution. linked to real transaction like buying a house, shopping, There may also be movement Many of these ecosystem education etc. As fintech towards Wealth As A Service, players may buyout fintech services are available via Open wherein any Financial as startups to fast-track the APIs through partners, large well as Non Financial Service movement. This trend will startups have started crossing Provider may offer Mutual continue to scale over next over to fintech. These players couple of years. GOVERNMENT TECHNOLOGY AND ECOSYSTEM

Government has – Government e financial services like from revolutionized fintech Marketplace ecommerce providers) ecosystem through – Psbloansin59minutes – Lending enablement introduction of government framework (OCEN in supported frameworks like – MF Utility progress) – Aadhaar Authentication – Sahamati We believe that government – Aadhaar e-KYC, E-Sign – Public Credit Registry (in would continue to support progress) the ecosystem through these – IMPS, UPI, AEPS, UPI initiatives as well as other – RBI / IRDAI / SEBI – GST incentives (like for digital regulatory sandbox payments). This will provide – TReDS powerful rails for Fintechs to – Data aggregation (beyond

[email protected] PAGE | 10 scale the business. shift in their organization Banks to PSU banks to large structure. Digital ambitions private sector banks, who As most financial institutions of the banks are already are mapping their customer would be embarking on their visible across the spectrum journeys with Fintechs and digital transformation in 2021, from NBFCs to Small Finance Neobanks. there would be a dramatic

CHANGE IN HR PRACTICES TO SUPPORT DIGITAL

HIRING & DOWNSIZING the Assets and Liabilities CREATION OF NEWER WILL GO IN TANDEM: business. There would UNITS be a definite reduction Hiring would increase across between 10 to 30 percent Current organization areas like product, technology, linked to the movement of structure may not support the digital marketing, compliance, customers towards digital, transformation expectations user experience, data science, improvement in processes, and hence, we would see the partnerships etc. There would and closure of branches. creation of newer units like: be rightsizing (10 to 50%) in the areas of operations, credit, 3. Impact on Operations : With change in customer sales, finance etc, whose 1. Banking As a Service: work may be partially or fully expectations and overall This unit would handle automated. Many of these automation across all Neobanks, Fintechs impacted employees will customer journeys, we and embedded finance move towards newer roles believe that over the next partners and would have through accelerated training 24 months nearly 30 to its own P&L. This unit may programs. 50% of front office, as well be named API Banking as back office roles, will get Unit, Open Banking 1. Impact on Technology: reduced. Anyone in these Unit based on individual We see a positive impact roles should take a long nomenclature. on jobs and opportunities term view and plan their for the tech staff working own career path. 2. Digital Banking: This on transformation. There team would handle the would be an increase up 4. Impact on Credit: full-scale Digital Business to 30 percent with the Automation in (including sales) of the management expectation underwriting has been bank instead of just moving from just “third one of the primary themes focusing on services as is party management or for digital lending over the current approach. program management” to the last few years. In this “insourcing and building year, we can see 15 to 20% 3. Data Science: We cutting edge technology reduction in these jobs are seeing an intense stack”. This would pave as larger institutions will movement towards way for an transitioning adopt newer methods of building an in-house Data phase for the internal underwriting. Science Unit to support teams, which will need overall business across all Multiple roles across support from HR teams. channels. Corporate, Treasury, Trade 2. Impact on Sales: We see will remain unaffected by an adverse impact on jobs market changes as Digital and opportunities for sales Transformation for them is still staff focused on Retail in inception stage. and SME segments across www.thedigitalfifth.com PAGE | 11

LEADERSHIP AND improvement on the current CHANGE IN BOARD LEVEL status where just 20% of these COMPENSATION CHANGES: entities have this experience STRUCTURE on their boards. We also In the next 12 to 24 months, believe that they may Digital skills are in short almost 30% of the top even come as a regulatory supply and will need to be management would be mandate. compensated outside the with deep digital/customer current baselined salary engagement/technology CHANGE IN KPIS and incentive structure. experience. This would create Without this basic change, As most roles go through internal challenges as many the organization with all right transition, the KPIs of current of these would be lateral hires intentions may not even as well as new roles would also and maybe from different age be able to start their digital need to go through changes. brackets and limited finance journey. This needs clear We have seen that multiple experience. mapping of skills with market organizations have made expectations. Forward-looking institutions the mistake of not aligning would not just hire for these performance measures with TRAINING AND roles, but actively support in newer expectations, thereby CULTURE CHANGE the amalgamation of these pushing the employees Skills required for running members in decision making towards sabotaging the digital Digital Initiatives are different and transformation journey. agenda. from skills available within We also believe that the In one example, we have large organizations. To ensure role of the leadership would seen new digital customer that teams are getting change to “Intrapreneur” due onboarding and servicing for the future, training of to environment of extreme platform was not supported resources around Fintech innovation, regulatory by the branch staff as they / Digital Lending / Digital interventions, volatility, were taking this initiative as Transformation / Open uncertainty, complexity and a threat to their roles with no Banking / Innovation / Change ambiguity. positive impact on their KPIs. Management would be the HR theme over the next few Almost all Financial years. These interventions institutions would have at may be done through internal least 1 Digital Leader on their champions as well as through board, which would be a vast external experts.

[email protected] PAGE | 12 WHAT IS THE BEST STRATEGY FOR OPEN BANKING AND HOW TO IMPLEMENT IT?

Open banking has opened up a new collaboration line for Banks to forge a partnership with Fintechs and build new business models using a set of banking APIs. Fintechs have also lapped up on these opportunities to create new business models like Neo Banks, Accounting Platform Embedded with Banking, and the recent phenomenon of Embedded Finance. With consumption of APIs, entire financial services have opened up to new business opportunities and growth dimensions. www.thedigitalfifth.com PAGE | 13

As the world is seeing more build stack of APIs in a long road ahead, many on Open Banking and partnerships with Banks banks have taken initiatives embedded finance, APIs will & FIs and making same around open banking and be at backbone transforming available for third parties; made good impact. But financial services & come From Plaid, Fincity, it remains a significant to center of this transition Truelayer to Setu or Zeta challenge for most banks and powering a new wave of at home building up API to get ready with a whole transformation such as stack platform suite of APIs (application programming interface) and – Emergence of new – Mobile Applications: onboard Fintechs fast enough business models: APIs have enabled the to create new business Transition from B2B or entire mobile application opportunitiesdespite having B2C business models to development process alignment of relationship. new business models like easier and faster; Kotak 811 B2B2C or B2B2B and other is one of leading example The entire process to combination; for example of developing whole of develop and onboard fintech Bank Open embedding Digital Bank on top of APIs partnership & Go-to-market banking services in may take months and maybe – Driving Innovation: APIs SAAS based Accounting a year. have made the internal platform and making both development process and Other financial segments banking & accounting management much easier such as Insurance or Wealth services available for their and efficient, leading to are yet to see a transition SME customers drive Innovation at a faster towards API enabled business – Platform or Aggregator pace models. Model: New forms of Though Open Banking is business setting up to still evolving and there is

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GETTING READY FOR or Open Business ( for easy of working with various banks OPEN BANKING reference for Insurance, & Fintechs and understanding Securities, Wealth etc) is modalities of business It is rightly said that Open primarily about strategy and demands, technology Banking is more about organizations need to take requirements, monetization; business and less of strategic view to set up API The Digital Fifth has devised technology, and definitely it is led transformation within full framework to define and not technology project driven organization as part of Open implement Open Banking through standard project Banking. Based on experience Strategy within organization. management. Open Banking

FIVE PHASED APPROACH TO DEVELOP & IMPLEMENT STRATEGY

1. Assess Open Banking business models or target view for movements within Readiness segmentation will form industry as someone at times critical component to define take industry leadership with This would be critical for Open Banking Journey. In just one innovation. This one early starter or even for addition, one need to assess segment is seeing massive organizations in mid of their competitive positioning, traction across the globe from journey. Business strategy partner ecosystem, current UK Open Banking & Europe along with short term and API maturity, technology PSD2 to Singapore or India. long-term plans will set readiness state, stakeholder’s So, it is crucial to explore context for Open Banking expectations and technology. innovation and activities Strategy for Bank. Business taking place across the globe. strategy of defining new Competition provides deeper

2. Redraw Future Landscape

Banks need to redraw the landscape of its business. Market is evolving at fast pace; customers’ expectations are changing while regulators also assessing innovation led approach. These transitions demand for organizations to draw future landscape for API led business for Bank and its opportunities. Open Banking is driving major transformation in industry through opening up of new business models, opportunities for monetization. During this process, One will lay down future landscape for Bank on API Journey. Below diagram provides overview on parameters to draw future landscape for Bank based on expectations.

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3. Create Open Banking New set of KPIs will be domains to drive Open Positioning another factor to be Banking considered while defining – Right customer segments Based on self-assessment its new open banking such as retail or SME and checking out on new positioning in the industry. landscape, Banks or FIs must – Approach to manage create new positioning for self This phase need to focus customer relationship like in Industry and document on Identification of Open partner led or Bank driven Target Business Model along Banking Use Cases – Define cost structure with all aspects addressing – Build monetization Open Banking strategy will such as: opportunities be used to design business – New Business model to model for the Bank. Business – This process will help adopt models will be defined based Banks/FIs to pick & define – API Banking Leadership on below aspects: open banking use cases as part of this phase. – Rolling out of API products – Focus on Bank on – Market Recognition Business activities/

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4. Align Open Banking Journey: – Operational Journey Initiatives & Define Open – Partner Engagement – Process Framework Banking Strategy Model – Governance Based on current state – Customer Engagement Framework assessment, analysing of Approach – Technology Enablement future state goal and Bank’s – Unified API Service positioning in Open Banking; – ESB / API Enablement Platform Banks/FIs should put down – Platform its Open Banking Strategy for – Productization of the organization. This process Services Below diagram is broad should cover Bank’s goal on representation for building – New Customer three broad objective: Open Banking Strategy Segment – Open Banking Customer

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5. Execute the Strategy has not been built in a proper you want to go about it. But, way to make it work. This has Strategy is designed to fail if it Planning and developing to have top down approach has not been built in a proper Strategy is one part of the and horizontally mapped way to make it work. This has game, Execution is the Key. across business units. Open to have top down approach Many of the banks & FIs have Banking Strategy needs to be and horizontally mapped struggled to put right tools managed from CEO or CXO across business units. Open and processes in place as desk and needs to operate as Banking Strategy needs to be part of execution and this a business unit. So, this would managed from CEO or CXO becomes major bottlenecks require participation from desk and needs to operate as in rolling out partnership with Operations, Compliance, Risk a business unit. So, this would Fintechs. Management, Finance and require participation from Strategy is to define what you other supporting units to be Operations, Compliance, Risk want to achieve and how do completely onboard on same. Management, Finance and you want to go about it. But, other supporting units to be Strategy is to define what you Strategy is designed to fail if it completely onboard on same. want to achieve and how do

[email protected] PAGE | 18 COMPREHENSIVE FUNDING ANALYSIS

The amount of vision and the right business funded With over $1.4Billion model has not wavered. being infused into the market. funding received by The Funding trend shows a According to the data over the dip post the month of June the fintech segment, past 4 months, the following and then slowly picks up trends can be Seen despite the economic again towards the end of the slowdown, is a clear – Lending and Payments year. continue to be the top March had the highest indicator of the picks for Investors number of startups being confidence that that – Large deals, have been funded, with 23 deals being closed that month and A the market has in the far and few over the course of the year, with total amount of $182 million segment. only 2 deals occurring of in investments. The lowest over a 100 million (Not amount of fund infusions Over the past 12 months, The including the 700mil in the fintech segment was Digital Fifth has collated all received by PhonePe from seen in the month of July, the funding data available on Wallmart). A major chunk which saw only 2 deals being Fintech startups, and created of Investments has been of closed and a net funding of an in-depth analysis to a small to medium ticket- $5.5million. understand how the market size has performed. The Impact of Covid is clearly – Due to COVID-19, here has visible on the graph especially This article provides an been a clear dip in the post July, both in terms of the overview of the funding market in terms of the number of deals being closed across segments, key patterns number of startups being and the amount of funds observed and insights on funded. being infused. While the how the external factors have months of March and April impacted the funding in – A major chunk of the witnessed an upward swing in segments. investments received terms of the number of deal has been Seed funding, closures, this can be attributed Due to Pandemic and showing that the investors to the relief package offered the economic slowdown see the market reviving by the government which it resulted in, the fintech itself at a rapid PACE boosted the optimism of the segment has seen a segment. significant dip in terms of – Insurtech has also seen a the number of statups being large jump in funding post The second half of the year funded during the initial Pandemic, as most of the the year has witnessed a months of the pandemic. But purchase of insurance has significant drop in deals. the year-end has witnessed shifted online. these numbers start to rise In terms of the amount of FLOW OF FUNDS and a positive traction is being funds raised, PhonePe beats ACROSS THE YEAR witnessed across all Fintech all others hands-down with $700Million being infused in segments. This shows that This year has seen a total of the month of December. But investors’ faith in the founder’s 112 Unique startups being www.thedigitalfifth.com PAGE | 19 since this funding was provided by Walmart which currently owns over 80% stake in PhonePe, we have not included this in our calculations. Other significant funding during the year includes API testing platform Postman, which received a funding of $150million and Razorpay which received a funding of $100 million for its new Neo Banking platform.

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TOP STARTUPS FUNDED

Funding Amount Company Founded Location Segment Focus Investors Type (USD Year Area Million) Series C 150 PostMan 2014 Banga- Enablers API Insight Partners lore development and Testing Series D 100 Razorpay 2013 Banga- NeoBank Pay- GIC, Sequoia Capital lore / Ac- ments counting Series C $160 - Pine Labs 1998 Noida Payments POS Investors in this Round: Master- $185* (India) software card solutions for offline retail- ers and brands Series C 84 Digit Insur- 2016 Ban- Insurtech Internet Investors in this Round: Faering ance galore first Capital, TVS Capital Funds, A91 (India) insurer Partners Series B 80 Cred 2018 Banga- Payments Credit DST Global, Ribbit Capital, Se- lore Card quoia Capital and Tiger Global Pay- ments Series C 75 BharatPe 2017 Ban- Lending QR code Investors in this Round: Coat- galore based ue, Ribbit Capital, Amplo and 2 (India) payment more app Series B 70.1 MoneyTap 2015 Ban- Lending App- Investors in this round: RTP galore based Global, Sequoia Capital, Aquiline (India) credit Capital Partners and 1 More line SERIES B 60 KHATA- 2018 BANGA- NEO- DIGITAL Investors in this Round: Sequoia BOOK LORE BANK LEDGER Capital, Tencent, DST Global and (INDIA) / AC- AC- 12 More COUNT- COUNT ING BOOK

* Pinelabs raised a funding of approximately $75 to $100mil in the month of December

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SEGMENT WISE FUNDING

The lending segment continues to have the maximum traction despite the challenging macroeconomic conditions. The segment saw the the highest number both in terms of the Number of startups funded and the of funding received. With total of 34 startups receiving a net amount of $462million over the course of the year. This sector has seen a consistent infusion of funds throughout the year with the maximum funding taking place in the month of March.

Apart from Lending, the Payment sector has also seen as many as 23 deal closures this year amounting to a total of $974million. Of this amount, $700 million was received by PhonePe in a funding round led by Walmart. This fund is a part of the spinning-off process of PhonePe by Walmart.

Since Walmart still owns over 80% of PhonePe, we have excluded this amount from our calculations

The Wealthtech and the Insurtech segment has also seen good traction over the year with 15 and 16 startup fundings being closed in each segment respectively.

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STARTUP FUNDING ACROSS FUNDING ROUND

A major chunk of investment seen this year has been in the early stage startups. 49 startups have received seed funds this year and 7 have received funding from angel investors. This is a major indicator of the investor’s confidence in the revival of the economy and the Fintech startup space. In terms of the amount of funding the maximum amount of funding has been in the series B. Apart from participation from the likes of Accion, Amazon, Matrix Partners India, Rainmatter Capital and Sequoia Capital, equally active engagement from Seed and Angel investors, like Beenext, Aspada Investments, IvyCap Ventures, Lightspeed Venture Partners and more was also seen.

CONCLUSION

Despite being a tough year for the economy, we have seen continuous investment in Indian Fintech Ecosystem with 100 plus startups getting funded nearly 1.5 billion dollars. We believe that with the massive adoption of digital expected in 2021, we’ll see more than 200 Fintech startups getting funded with expected amount ranging between 3 to 4 billion dollars. This investment will be focused on SME Neobanks, Lending Fintechs, Fintech Enablers (or Fintech Infrastructure platforms), Insurtechs, and Embedded finance. Marketplace platforms, Retail Neobanks, Wealthtechs and Regtechs would continue to lag in the funding rounds.

As for valuations, we see significant jump linked to higher digital adoption, availability of bigger funds with VCs and increased interest of Banks & Financial Institutions in the ecosystem.

www.thedigitalfifth.com PAGE | 23 TOP OPEN BANKING INITIATIVES IN INDIA -2020

The decade started INDUSTRY/ customers faster and better. with a lot of Account Aggregators are GOVT LED the key to the transforming expectations and Open Banking initiatives in major changes in INITIATIVES India and the network of the participants is going to the Banking sector. ACCOUNT be a massive one. With the COVID or Mutant AGGREGATOR higher focus on the customer centricity through the consent COVID has posed The Account Aggregator driven approach, and a concept has been in the collection of digital services a lot challenges market for a couple of years available at the request of and changes to the now. With more than three one click through Account entities with the operational Aggregators, is the model that business community license to build the Account Open Banking services from and Banking sector Aggregator system, namely banks in India will scale up to. One Money, CAMS Finserv, was no different. and Finvu, COVID has OCEN delayed the launch of their All of this is an The new age financial platforms in 2020. With no inclusion in India which will old story now and open information available democratise credit starved in the market pertaining to Banking sector has population of India, is Open the launch of these Account Credit Enablement Network realised the need Aggregator platforms, (OCEN). The traditional model early 2021 is just a mere has failed to provide the credit for digitisation expectation. solution for the population and seamless Account Aggregators will in India that needed it the most. This public innovation open banking enable seamless Open Banking facilities by enabling framework is going to work in infrastructure is the customers consent to close association with Account share their data digitally. It Aggregators with an aim to key to achieve it. In is expected that the BFSI bring large scale innovation this report, let us domain will entirely rely on and integration capabilities Account Aggregator services into lending platforms. understand some which are complaint to In hope to provide loans to of the major Open regulations building around borrowers in a timely manner Consumer Data Protection, Banking initiatives with the help of Technology to share or receive the data driven Open API’s that will in India, that lay securely and digitally. The put the borrower in the digital transfer of information proximity of not just one, but grounds for more to will enable faster turnaround a network of lenders. OCEN time from the BFSI service systems emphasise the use come in 2021. providers and serve the

[email protected] PAGE | 24 of technology to reduce the impact of OCEN, the Open scale global players into gaps in gathering documents lending model, is to provide the Indian Lending Market. and digital disbursement of a universal language for OCEN will ensure lending the loans, to serve the new lenders in the market to partners to be regulatory customers better. scale and build innovative compliant structure that financial credit products. With will bring in innovation, OCEN will empower open ease of systemised lending, customer centricity, and banking capabilities to there is a greater chance of new investments into the individuals and MSME’s with improved competition in the market. This would reduce the help of standardised set lending segment, offering the credit gap in the market, of APIs that can effectively loans at lucrative interest leading to the improvements plugin the lending rates to the customers in on the lifestyle and business capabilities, into their current need of it. The future of OCEN capabilities of the customers. products and services. The will pan out bringing large

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DEPA principle (Open, Revocable, the customer confidence Granular, Auditable, provide on the financial services The Data Empowerment Notice, and maintain Security offered in the market and and Protection Architecture by design), to empower aims to improve customer (DEPA) puts every citizen of adoption of standards for participation in a secure way. India in the driving seat w.r.t data storage and processing Like the CDR in Australia, their data. DEPA aims to techniques. aiming to include all public bring democracy in consumer services into the Data DEPA’s data governance data space and the service Protection, similarly DEPA concept in the new age providers, involving the use has the capability to spread Open banking system will of standardised technology across into various public ensure that the customers architecture. DEPA supports services industries. Tighter have complete control over secure, interoperable and data privacy laws could mean their data. This will help privacy respecting framework peace to customers and the them explore the financial for data sharing through firms requesting the data product offerings and will Consent artefact, data must implement advanced bring in Fintech players sharing through Open API’s infrastructure, to safeguard into the market ensuring and a standard for Financial the data from the customers. information. Consent Artefact innovation and competition. will be based on ORGANS DEPA is focused to improve

Source: Niti Ayog

PCR loans, repayment history of borrowers to the lenders in the borrowers, ancillary data the market, giving the lenders Public Credit Registry (PCR) like overdue utility payments, a 360-degree view of the is a repository initiative by RBI or tax payments data from credit history of the customer. that will put together the data tax authorities, and other PCR will also ensure that the of individual and corporate primary data in a single large credit history of the customer borrowers (new and existing). database. is available to all the lenders, The idea is to maintain the to evaluate the risk and credit PCR aims to reduce credit history, outstanding worthiness of the customer. information asymmetry of the

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The result of the risk and the market which in turn improving the transparency credit worthiness evaluated is focused to improve the in the market. Though there will not only improve the business conditions. The open are heaps of initiatives ahead businesses to mitigate risk, repository will ensure that to be implemented, for the but also provide the choice for the lenders have an account PCR to get Operational, there the customer i.e., to choose of the individuals, corporates, is a lot it can bring to the and compare the lenders SME’s and MSME’s on loan table to both customers and and their services. TCS and outstanding, repayments, lenders to ensure a win-win Dun & Bradstreet have been loan exposure, collateral proposition. With the Open identified as the bidders at including the incoming API technology, OCEN and the forefront, with a pending cashflows, helping the lenders PCR the lending industry is technical evaluation from RBI. reduce bad debts. PCR will due for massive reforms that also ensure the monitoring can transform the outlook of PCR will reduce the of the microfinance industry, the industry. information asymmetry in

Image source: RBI

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INITIATIVES BY PRIVATE PLAYERS IN THE COUNTRY

ICICI Stack

‘ICICI Stack’ is a set of API’s Bank offers the digital services digital facilities available to and comprehensive digital to Individual customers like the customers 24*7, without banking services to individual opening of instant savings visiting the branch. Retail or commercial customers. account, Fixed Deposit, customers can have enriched ICICI Stack offers more than Public Provident Fund, Buy experience while business 500 services that provide all Insurance, wealth creation, customers can improve the banking requirements among others. The Business productivity even while to the customers in one customers can use the away from office. It was the location. Most of the services facilities like Insta Biz, Point of initiative that was Just in time provided are the first time the Sale, or Payment gateway (as when the situation demanded industry has experienced and the need suits the customer), business behind closed doors are available on the Bank’s Insta Overdraft, access to Biz and this could be the future, portable platform. circle, among more. ICICI but in a different and better Stack is leading the Open situation. This fine initiative from ICICI Banking path with seamless

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Angel Broking the business centric Open API enabling API’s will ensure high approach. participation of Technology and Edelweiss driven Insurance that will Analysing the case of make life easy for customers. The Banking industry is Edelweiss General Insurance, raking up the technological the Open API’s can enable Angel Broking’s Open API innovation through Open enhanced claim process, will enable new investments API’s is also spreading to collaboration with other and trading platforms that the speciality firms in the insurance providers, and can run without the burden BFSI segment. Firms like distributors with low cost of licensing. Their Open API Angel Broking (Financial of integration with ease of will enable access to end- Services – Trading) and access to information in real to-end broking services and Edelweiss (Insurance) have time. The API sharing will enable new products to be also introduced Open APIs. give customer the choice trading ready in minutes. This Witnessing these innovations, and a better experience on will enable traders have the one can now agree that whole all claims or post insurance flexibility to implement their of BFSI segment is bullish over needs. Other big players also own algorithms for trading,

Image source: Angel Borking www.thedigitalfifth.com PAGE | 29 new start-ups building the long-awaited personal start-ups building robotic innovative solutions and to touch to not-so-tech-savvy advisory services on stocks, offer personalised trading customers, making trading or Language assistants or platforms and websites the next wonder segment platforms that can speak to catering to investing and that can transform the the customers, eliminating trading audience. The Financial services industry. the lag in real time trades. impact of Open API from The future of the industry Angel Broking will bring could be very interesting, new

ICICI Bank online recharge and Banking innovative solution from services like savings account, ICICI bank could set other interoperable loans, investments, credit banks with sophisticated Banking cards, among others by applications to attract new linking their account to the wave of customers, bringing Application ‘iMobile Pay’ application. in large scale interoperability ICICI bank has emerged as and personalisation to Taking the technology the tech innovation leader banking sector. The smaller capability of the other Banks among the other banks banks will have to gear up to out of equation, this initiative in the industry. They have this tech prowess, else the from ICICI bank will enable recently launched a ‘first-of- customers could gradually the customers movement its-kind’ mobile application play makeshift from one bank towards Open Banking, as ‘iMobile Pay’ which can now to another. Will this initiate it was largely market driven allow payments and banking banking industry to port till date. ‘iMobile Pay’ could services to customers of any accounts from one bank to facilitate the customers of bank. Through ‘iMobile Pay’ other like mobile numbers, regional, cooperative, and customers can generate UPI along with the credit history of small banks with UPI, bill id, pay bills, shopping, fund the customer? That would be payments or other seamless transfer, use digital wallet, something that we can think banking services. This of in future.

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HDFC Bank Smart and web based. It will support country in future, which might a range of features like POS, not be too far away. Hub Merchant Digital khata, collection Solutions 3.0 for reminders, management of 2020 has been a revolutionary billing, inventory, payments, year in terms of Technology SMEs and lending based on their improvements, or investments in technological services ‘Smart-Hub Merchant bank history / business from every firm, to go digital Solutions 3.0’ is a HDFC capability. This technology in every step. Major changes bank initiative to allow self- driven Business initiative and reforms coming from the employed professionals will provide ideal forum for BFSI segment, especially in and merchants to accept the merchants to enter the the Banking industry. With payments in store, online digital ecosystem through almost every major bank and on the go by the instant simple and convenient heavily investing on the tech current account offering. The solution. Smart Hub will infrastructure could mean the bank looking at 20 million take digital payments and banks will soon be completely customers to use the smart technology to manage the capable of executing Open hub from semi urban and businesses, to rural India and Banking services. 2021 rural India to deepen the this will improve the bankable could witness most exciting market penetration of digital capabilities as well as bring Open Banking concepts payments across India. in digital reforms to small time vendors. Digitisation of turn into reality from the Smart-Hub will be both every business will transform conceptual stage, marking it Mobile applications based, India into a completely digital to be the year of reforms and innovation.

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Banking and to be true with term collaborative approach to work together and develop Financial services making around new products, business have been going “Embedded Finance”, models, and value drivers for customers. Emerging through major which enables demands from Fintechs led to transition with any non-financial banks opening up its services and data through APIs and emergence of new company to provide drive API enabled Banking, and now widely been termed business models banking services as Open Banking. With use around Neo Banks, from its platform of wide range of APIs from various business models Challenger Banks, by integrating with evolved across financial Banking-As-A-Service banking partners. services, be it payments, lending, investments, etc. and its positively Application Programming Though Fintechs have been Interface (APIs) have made turning around mainly benefitted in the entire this new banking models business of Open banking, the way banking is possible through extending Big Tech ( widely been used banking services from Bank’s for Google, Apple, Facebook, delivered. Once Bill platform and delivering it Amazon, Microsoft, and through third party platform. Gates said “ we need others) spotted significant This whole phenomenon opportunities to enter into banking, not banks”. can also be termed as Open financial services space. Big Banking. In this era of Open This is turning around techs have scaled to mass Banking, Banks adopted a

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Source: CB insights scale and delivering wide techs having othersa to fast Payment Interface) payment range of technology services track their financial services, ecosystem post embedding through their platforms it is essential to look at the payment mode powered and banking is always been transition made by some of by UPI platform to provide interesting segment for them these big techs into banking. both P2P and P2M services to explore and embed into in the Indian Market. In last 1 their product portfolio. Be it year, Google pay has become Sundar Pichai or Jeff Bezos, Google one of top three players all have clearly shown their in India in UPI payments deep interest in the financial Google Pay has been one of alongside Phone Pe and segment and esp in Banking. the success stories for Google Paytm where they command in payment space across close to 94% market share. In Open Banking made things the globe, which is more November 2020, Google Pay easier for them as they could of digital wallet and online clocked almost 100 Million use banking services from payment platform powering transactions. Banks through APIs and build person-to-person as well as better customer engagement Google Plex, digital checking in-app payment services. & value proposition for their account, in partnership with Google Pay became one of set of customers. Before Citi Bank is stated to be major force in UPI (Unified getting into advantages big launched in 2021 on Google

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Source: https://www.apple.com/apple-card/

Pay platform. The Google- like Gmail, Google Maps, do lots of banking services in Citi Plex account is a new Google docs and global partnership with Banks, it is digital checking and savings presence; Google remains investing heavily in Fintechs to account designed to make a big advantage position widen its portfolio. money management intuitive to make better insights Amazon Pay has already been and engaging powered by about individual and successful in most of the analytics. embed financial services in region with its digital wallet personalised manner. Google has already kind of functionality. In India, announced the launch of Amazon has implemented Google Card, a kind of debit UPI functionality to its card, co-branded with a Amazon Amazon Pay and built a Banking partner. Recently, complete payment app to Google has further widened In the race of widening facilitate funds transfer, bill its ambition to drive banking banking services, Amazon is payments, recharge, and services when it announced taken big jump by leaps and other features. Amazon to launch mobile banking bounds with venturing into took a big step towards accounts in partnership with banking services space with strengthening its payment BBVA USA, Bank Mobile, BMO payments to lending to selling game by integrating with Harris, Coastal Community insurance. By looking closely, Worldpay, in 2019, to act as Bank, First Independence it would look like Amazon is a back-end intermediary Bank, and SEFCU. building the future of banking between banks and credit within its ecosystem. Though card companies. Being fully embedded in Amazon is mostly trying to individual life with services Apart from payments,

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Amazon has ventured into expected to be launch in 2021. Apple lending through multiple In India, Facebook is partnerships with banks such making another big Always hailed as one of the as Bank of America Merrill inroads in banking through most innovative companies, Lynch, Goldman Sachs, ING. integration of UPI services Apple has already worked As per the CBinsight report, on its Whatsapp Platform with Goldman Sachs and Amazon has already issued in partnership with multiple Mastercard to launch Apple $5B of loans till 2019. banks in India. In addition to Credit Card for its customer, Facebook UPI payments, Facebook has which is directly integrated announced its intentions to with iPhone. Apple already has Apple Pay, a digital Facebook is another big roll out Insurance and pension wallet kind of functionality tech which has shown its products by end of this year. on the iPhone, which allows ambitions to roll out banking customers to add money services through its platform. Microsoft to it and use for contactless It was in 2013, Facebook Though, Microsoft has yet payments as well as for online embedded funds transfer to provide direct banking transactions. capability from its facebook- services, and it has made social media platform through Driving Factors for Big Techs its intention clear with a messenger in partnership to push their Banking Goals partnership with plaid to with ICICI Bank. Since then make Excel as Fintech App. Facebook has made massive Though there have been more Microsoft has partnered transition in financial services. use cases across financial with Plaid to let people In compared to other Big Tech services, these big techs are automatically import their players, Facebook has trying operating into or getting into bank and credit card account to make inroads into crypto it. Open Banking undoubtedly data into a new personal currency when it launched gave them the edge to keep finance tool called Money in Libra, Facebook Digital exploring and adding banking Excel. Currency. They also launched services to their wings. Calibra, Facebook Digital But there has more, which Wallet to store Libra. The does provide them with the crypto currency platform is advantage to launch and pose

www.thedigitalfifth.com PAGE | 35 formidable threats to Fintechs Trust- Undoubtedly, Big techs underwriting processes, and and the banking ecosystem. enjoy their fan following, be new products. Big Techs We looked at some of the it Apple or Google because have developed superior reasons as follows: of their ability to the superior capabilities around AI/ML service model and sustainable and have used successfully Ecosystem: Big techs have quality. Banks have yet been in their existing product and developed their ecosystem able to hold their fort in the service stack to power their well where they own their age of Fintechs primarily growth. The same skills on AI/ customers, their value chain. because of the trust factor. ML provide them an edge to For example, Amazon has its When these big techs bring couple their financial services. e-commerce platform with a similar level of trust to its customers, resellers, and Capital One of the reasons customers to use banking then coupling with other for the big growth in Fintech services from them, it value propositions from & startup evolution is the makes it easier for them to Prime, Alexa, etc., and all well availability of capital. Today, roll out banking. Big Techs integrated. This makes it easy the majority of available power their trust factor with for them to plug in financial capital, mainly through Banks and play well on the services and operate it within Venture funding, has gone positioning. their ecosystem. into technology. To drive Stronghold on Customer innovation and customer Platform Enabled Banking: Engagement- Big Techs have outreach programs, ease Technology is the backbone known for building the best of of capital helps startup to for Big Techs on which class customer engagement drive their business model. they have built on their for their customers through Big Techs have been widely business. Platform-based building a robust interactive placed on cash, which makes architecture has been core model with continuous it easier for them to drive to its technology, which engagement. innovation and spend well allows them to develop, build, on customer acquisition launch, and scale various new Big expertise in AI/ML programs. features and solutions at a Artificial Intelligence and rapid pace. Micro-services Machine learning have There is little doubt that big based architecture enables played a significant role techs will play a significant big techs to plug in easily in transforming financial role in banking because of with Banks using APIs and roll services and digitization. AI/ their inherent advantages out financial services to their ML developed model has led through continuous customers. to the emergence of new innovation and partnership lending models, better credit structure with Banks.

[email protected] PAGE | 36 FINTECH ACQUISITIONS - 2021

Impact Segment Acquirer Acquiree Amount Lending Lending Eduvanz Klarity Undisclosed Increased Ecosystem Reach and Impact Qbera from Estimated InCred Ant Creditex $10-$15 To augment Technologies million To merge LazyPay and create a full stack PayU Paysense $185 million digital landing To improve client base and provide a full Wealthtech Scripbox Mitraz Financials Undisclosed stack wealth management solution Undisclosed- Niyo To provide a more comprehensive product Goalwise cash-and- Solutions line stock deal Infibeam Cardpay To provide a complete suite of payments Payments Avenues Technologies $61k acquiring and payments issuing products Limited Limited Navi DHFL General As a part of building a complete banking Banking Undisclosed Technologies Insurance Product Suite GST software and Services business To bolster ClearTax’s enterprise customer Other ClearTax of Karvy Data Undisclosed base and help then scale up their GST Management business Services To enable Instamojo to become a full- Instamojo GetMeAShop $5million fledged business operating system for businesses

1. Fintech firm Eduvanz management platform Technologies for an which focuses on Scripbox has acquired a undisclosed amount that education financing, controlling stake in Mitraz is estimated to be around has acquired Klarity , a Financial, an investment $10-$15 million. Qbera has startup that provides advisory firm providing a strong lending platform career coaching through personalized financial for personal loans and the one-on-one video- services to high net acquisition will help Incred based interaction. The worth individuals (HNIs) to augment its digital acquisition has been for and ultra high net worth distribution strengths and an undisclosed amount. individuals (UHNIs). With contribute to the launch of The acquisition helped this acquisition Scripbox its platform business. Eduvanz to increase its and Mitraz Financial will 4. Fintech company PayU network of education reach out to a larger set of has acquired a controlling institutes and also improve clients by providing a full stake in PaySense, a its reach on the ecosystem. stack wealth management digital credit lending Klarity Team will help solution powered by the platform and all its assets Eduvanz users to not only tech, data, and science. at a valuation of $185 finance their courses but 3. Incred Management million. PayU will merge also help in choosing the and Technology Services its consumer lending right course for them. acquired fintech firm business Lazypay with 2. Digital personal wealth Qbera from Ant Creditex PaySense to build a full

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stack digital lending Since its inception Navi with a comprehensive platform in India. PayU Technologies made it credit issuance portfolio will inject a sum of clear that it intends to go including secured and $200 million in the new for a full banking license unsecured lending merged entity in the and using tech at the form of equity capital, center of the operations. PREDICTIONS where $65 million will be This acquisition fits in FOR 2021 immediately invested, and the direction to fulfill its With successful Fintechs as the remaining corpus will banking ambitions. Navi well as Financial Institutions be infused over the next Technologies is following looking at adding new two years to help the loan The Flipkart strategy and products / segments, this book grow. acquiring the streak of year would see the highest companies to build a number of acquisitions in the 5. Digital Banking fintech comprehensive portfolio. market. startup Niyo Solutions has acquired Goalwise, 8. Fintech company – Banks and NBFCs a new age mutual funds Instamojo has acquired will acquire primarily investment platform in a GetMeAShop for $5 million lending fintechs for their cash-and-stock deal for from Times Internet. technology and customer an undisclosed amount. GetMeAShop is a startup access The founding members that allows businesses of Goalwise will join Niyo’s to setup their wesbsite, – Wealth firms, who have leadership team and will build an online store shunned technology run Niyo Wealth as an and help businesses to till now, will acquire independent vertical in the engage with customers wealthtechs for their tech startup. This acquisition through the social apps prowess is in line of Niyo’s goal of such as WhatsApp & – Payment fintechs will building a comprehensive Facebook. This acquisition acquire smaller payment product suite and will help Instamojo to players, wealthtech, inclusion of many more become a full-fledged insurtech players financial products. business operating system for businesses. – Lending fintechs will 6. ClearTax, an online tax acquire wealthtech, filing platform, has 9. Fintech solutions provider insurtech to bring width to acquired GST software Infibeam Avenues their business and Services business of Limited acquired Cardpay Karvy Data Management Technologies Limited. The – Wealthtech players would Services for an undisclosed deal has taken place at an acquire smaller wealthtech amount. The acquisition initial cash consideration players for access to will bolster ClearTax’s GST of rupees 45 lakh. customer base enterprise customer base. Infibeam will incorporate With this acquisition, Cardpay’s services into more than 200 enterprise its own, allowing it to customers of Karvy will offer a complete suite move to ClearTax. This of payments acquiring acquisition will help Clear and payments issuing Tax to quickly scale up products, present on their GST customer base. both sides of digital payment transactions. 7. Financial Service company The acquisition of Navi Technologies has Cardpay strengthens acquired DHFL General Infibeam’s Payments Insurance for $14 million. credit services business

[email protected] PAGE | 38 KEY REGULATORY CHANGES

RBI ISSUES GUIDELINES SC ALLOWS TRADING IRDAI PERMITS VIDEO- FOR PAYMENTS IN CRYPTOCURRENCY KYC FOR ONBOARDING REGULATING BODY INSURANCE Supreme court (SC) has CUSTOMERS Reserve Bank of India permitted trading in has issued rules for non- virtual currency including Insurance Regulatory and government self-regulatory cryptocurrency which was Development Authority has organization (SRO) which will earlier banned by Reserve permitted general and life be tasked with collaborating Bank of India (RBI) on the insurance providers to use with all the stakeholders for grounds of higher risk video-based identification formulating and enforcing potential. process (VBIP) for onboarding rules for payment system customers, RBI has already Read more... operators. permitted financial institutes for video-KYC, it will help Read more... STARTUPS TO BE INCLUDED IN PRIORITY in reducing the manual RBI ALLOWS AADHAR SECTOR LENDING process and in preventing the BASED VIDEO-KYC pandemic. Reserve Bank of India (RBI) Reserve Bank of India (RBI) has included startups in Read more... has permitted financial priority sector lending with a NSE ALLOWED institutes to perform view that startups enable hi- TO UNDERTAKE Aadhar based video-KYC tech and all-inclusive growth. E-KYC AADHAR for onboarding customers, Banks are required to provide AUTHENTICATION which will reduce the manual 40 percent of their exposure intervention and increase to priority sector. Securities and Exchange digitalization of onboarding Board of India (SEBI) has Read more... process. allowed National Stock Exchange (NSE) to undertake Read more... e-KYC by eight entities which were notified in May.