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Startup funding: 2018 was the year of Fintech startups, ecommerce investments slipped to second place

8 8 22
05.12.2018

2018 saw Fintech lead the funding charts as investments in Lending surged and Payments held its own. The early-stage continues to see great momentum and funding has increased in almost every sector across the board. While the total amount raised is slightly lower, that’s mainly because 2017 saw Paytm raise $1.4 billion and there were no such billion-dollar deals this year.

It has been a little over two years since demonetisation gave India’s fintech sector the boost it needed to burst into the mainstream. India-specific payment infrastructure innovations such as the Unified Payments Interface (UPI) have won the common man’s trust, and global companies have turned their rudders towards the country to cash in on the opportunity (no pun intended).

So, it’s not surprising that fintech has received much attention and (monetary) love from investors. The last two years, one might say, have seen the sector come of age, showing investors a strong value proposition, helping with financial inclusion and taking the mystery out of finance.

As we wrote in our 2018 funding analysis, Fintech has emerged as the sector of choice this year among investors. Last year, it played second-fiddle to Ecommerce, but only because Flipkart’s super-giant funding rounds tipped the scales away from Fintech. 2018 is yet to see any large deal like Paytm’s mega $1.4 billion round raised from SoftBank last year. The payments giant is at the top of the leaderboard again this year with the $300 million it raised from Berkshire Hathaway.

Total funding raised across fintech and financial services came in at a shade over $2 billion as of November 30, 2018, down by 13 percent over $2.4 billion in 2017. Nevertheless, the number of deals increased to 132 versus 103 last year, reflecting increased interest and activity in the sector.

Sanjay Swamy, Managing Partner at early-stage VC firm Prime Venture Partners, which has invested in a number of fintech startups, believes the size of the opportunity for the sector continues to be large considering that it remains highly underpenetrated. “Apart from the........

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