Market Study of Financial services startup landscape for INDIA region -2019 anshu.bakshi@gmail.com

1. India Fintech 2019
$2B in 2018
$4.9 B in last 3
years
Deals increased
to 132 in 2018
vs 103 in 2017
600 startups in
the space of
lending,
payments,
wealth
management,
InsurTech and
RegTech

2. Key Business Drivers - India Fintech Space

3. UPI/Mobile Wallets/Prepaid cards
1.The payment space is the most competitive
segment and provides a strong growth potential as
the macro trends are in favour
2.UPI payments crossed the Rupees 1 trillion
($14B) milestone for monthly value in Dec
2018, growing nearly eight times over the
previous year
3.There are over 460M internet users in India;
More than 50% of the population in India is
below the age of 25; The “Jio” effect
4.The Indian digital payments industry is expected
to reach $700B by 2022 in terms of value of
transactions
5.Brings in unbanked and the underbanked onto
the system via innovation and ease of access

4. PoS / merchants payments battleground
1. There are close to a billion debit card holders and only 43M
credit cards in India according to RBI’s Jan 2018 data; Against
these, there are only 3.5M PoS terminals, showing the huge
opportunity that exists in the POS payments service sector
2. Debit card transactions increased 76% at the end of October
2018
3. India’s market for PoS terminals is expected to cross $3B by
2024
4. After disrupting the telecom space, Reliance Jio is now moving
into the payments space offering cheapest PoS terminal at Rs
3,000 (traditional bank PoS costs 20,000-25,000) and with 0%
MDR for debit/credit transaction up to Rs 2,000

5. Consumer Purchase Financing & loans
1. India’s lending startups raised c.$953M (2018),
Partnering with e-commerce companies, Brands, and
other Offline LFRs to finance purchases; Lender pays
a merchant directly and gets repaid in EMIso
2. Cater to the large number of customers without a credit
card; only about 43M people in India have a credit
card where there are about a billion debit cards
3. Target demographics: debt consolidation, students,
new to bank, new to credit (NTC) and underbanked
consumers
4. Traditional bank underwriting relies on a “thick file”
credit history, but significantly less than 100M of
India’s 1.3B population qualifies

6. Wealth management / Trading platforms
1. Only 2% of India’s population invests money in
market traded securities, thus, there is a lot of headroom
for growth within the sector
2. Consumer education and adoption are the challenges
at the moment
3. Complexities of underlying products and platforms
are current barriers
4. Fintech platforms are changing cost structure by
increasing scale, decreasing overhead costs, and
improving adviser productivity, and greater
transparency

7. BUSINESS Lending
1. A large amount of unmet demand for loans from MSMEs, with
a gap of roughly $200B in credit supply
2. 97% Indian SMEs have reported late payment of their invoices,
and close to 56% had working capital issues due to unavailability
of credit
3. Embracing a tech-first or tech-only approach to underwriting and
are providing balance sheet support to other fintech companies
4. Advantage over banks: NBFCs can vary their rate of interest
(PLR as opposed to MCLR) that banks can’t due to RBI norms,
providing more options to customers
5. Companies like Drip Capital, KredX and others are also
targeting invoice discounting and working capital financing,
providing cash and fixed income investors an access to low
correlated asset class with attractive risk adjusted return

8. Marketplaces / Comparison platforms
1. Helps in collecting the documents required for KYC
and submits it to banks, which makes the application
process easier for the customers and banks
2. Revenue model: generate revenues by earning a
commission on applications or granted products for
banking products
3. DMI, for instance, reportedly processed over 100,000
loans in the month of May 2018with a small
dedicated team of 24 professionals, with more than
90% of the loans receiving a credit decision in less
than a minute

9. Thankyouanshu.bakshi@gmail.com

10. Anshu Sharma
Wallet Market - CHINA

11. Financial Product % spread

12. Financial Services Landscape