Fintech in 2020: How did Indian Startups perform?

India is amongst the fastest growing FinTech markets in the world, states an Invest India report. India ranked the highest globally in the FinTech adoption rate with China. Digital payments valued $65 bn in 2019 and grew at a CAGR of 20%. The year 2020 has been monumental to the FinTech sector as Indians were almost dependent upon digital payments. We learned more about how to save and invest and the importance of it all.

According to the Invest India report, the key growth drivers of Fintech industry is a high smartphone penetration. There are over 1.2 bn mobile subscribers with growing disposable income. It states that India has witnessed a wide middle-class expansion. By 2030, India will add 140 mn middle-income and 21 mn high-income households. Thus, they will drive the demand and growth of the Indian FinTech space.

Adding to these, the India Stack Set of APIs for businesses and startups and key government initiatives such as UPI and Digital India has provided a solid base for the adoption of technology in the finance sector. Key segments within the FinTech space include Digital Payments, Digital Lending, BankTech, InsurTech and WealthTech.

Digital Spending

The surprise demonetisation move had given a massive fillip to the fintech sector. Government policies also evolved quickly, providing a favourable backdrop for fintech. Yet, 2020 gave a hard push to adopting digital spending. “The pandemic has transformed the way businesses function today”, says Jatin Bhasin, VP-Product, Capital Float. “This inevitable change also brings an array of opportunities. The Fintech industry is well-placed to innovate and adapt to this new normal. Since the lockdown, there has been a massive transition from the traditional model of buying to e-buying.”

Talking about how 2020 faired for Capital Float, Jatin says, “We have built tools for digital trust, enabling lenders to disburse and monitor loans. Our buy-now-pay-later (BNPL) product has become very relevant to customers in enabling recurring purchases. From April 2020, Capital Float has financed customer purchases over Rs 500 crores and served over one million customers thus far this fiscal year. We, at Capital Float, are confident that the BNPL model will continue to be a substantial part of the shopping experience in the post-pandemic era.”

On a similar note, Sandeep Anandampillai, Founder and CPO, Crediwatch adds that “Several businesses were affected due to the inability of customers and businesses to come face-to-face and transact. However, thanks to the adoption of technology, it's been possible to continue banking activity.”

Digital Lending

2021 is the year of new promises and possibilities for both lenders and borrowers. But there are lessons we need to learn from 2020. Madhusudan E - CEO, KreditBee states, “We were able to wither possibly the strongest storm of our lives. Yet, we have come out stronger with a business that is almost comparable to pre-COVID levels. 2020 helped us get more agile as a workspace by identifying ways of not just remote working, but also remote monitoring, tracking and reporting to ensure we don't compromise efficiency. As an organization, we were able to identify multiple consumer offers and offerings during COVID. They not only gave the consumers larger confidence in us but also highlight innovation as an important part of the organizational DNA."

One of the factors that propelled the lending growth from banks to NBFCs, is that the partnership between this dynamic sector and the experienced traditional banking sector. Phani Raj, Founder of Zaggle states that "Collaboration between the above two can bring the best of both worlds and offer unique products to a larger number of people in India."

An exponential growth

One such example is SmartCoin. Consumer lending platform, SmartCoin reached operational profitability in January 2020. In March, they raised more than $7 million in Series A funding. They had then aimed to grow their loan book and expand the team and product catalogue. “True to our word, we did that. With the increasing enhancement of gamification, we have doubled our user engagement and growth rate is also bouncing back to pre-covid,” states Rohit Garg, Co-Founder and CEO.

mPokket Founder and CEO, Mr Gaurav Jalan says, "Just like the adage, we at mPokket faced 2020 not as a challenge but as an opportunity. Despite Covid-19, we have disbursed 70% more loans than last year. In FY 2020-21, that amounts to Rs 1,200 crores. Soon, we will make our products available to a large customer segment, including self-employed people. We will also offer our customers innovative options such as pay-via-EMI checkout at their destinations of choice. Just goes to show – a can-do attitude can triumph over any adversity, even one posed by a global pandemic.”

Digital Saving

“Winston Churchill once said, “Never let a good crisis go to waste”. The saying was proven to be true during the Covid crisis,” says Mr Samant Sikka, Co-Founder & Chief Dreamer, Sqrrl. “While many suffered through losses, people surprisingly turned the crisis into an opportunity to save and invest their hard-earned money.”

“During the lockdown, we were pleasantly surprised with the uptick in the number of users on our platform. The increase was not only in the number of users but also in the investment amount. Our team started working from home from March 2020 and went on to launch multiple products and features including FD and NRI investments. Simultaneously. we improved our old products, to meet the growing user demands. During this period, our biggest achievement was our B2B partnership with ICICI Bank in November 2020.”

Another savings platform, Finin, also expressed beginner's growth in 2020. “We are a story of 0 to 1 as we spent 2020 building India's first-ever consumer neobank and took it live in December,” says Suman, Founder & CEO, Finin.

Pulling through tough times

The Indian Fintech in 2020 was not just Pandemic-Resistant but also pandemic compliant. While other sectors struggled to adjust to the new world that the Covid-19 pandemic has forced upon the economy, FinTech managed to pull through and facilitate services to its users. “The fear of losing jobs and incomes led millions to the stock markets. Thankfully, the exchanges and broking platforms were among the only few businesses that were operational during the lockdown. We grew by around 100% in 2020,” says Tejas Khoday, Co-Founder and CEO, FYERS. “We achieved 1 million customers in June 2020 and added the next 1 million customers in less than 5 months,” says Ravi Kumar, Co-founder & CEO, Upstox. “Currently, almost 75% of our customers are below the age of 35.”

“The business resilience of Oorjan enabled it to sail through this pandemic,” says Gautam Das, Co-Founder & CEO Oorjan. “We remotely assisted our clients, digitally surveyed sites and onboarded 250 customers across 10 states. We enabled financing for more than Rs 25 crore. Now, clients will save about Rs 7 crore in electricity bill every year while making the world greener. Overall, this year helped us push our limits and find solutions to deal with the new normal while reaching new heights.”

The new-age fintech platforms are already offering consolidated fintech solutions to users. They enable them to carry out a range of operations such as spending, lending, investing, fund transfer, etc. Thus, we will have to wait for 2021 to show what these new-age fintech companies will provide to Indian users in the post-lockdown, post-pandemic future.

More stories coming up

Let the year 2020 end on some positivity and good stories. Follow this space to read more success stories of startups during 2020 in the coming few days.