The New Leader of Fintech Investment: Mobile Payments-Hungry India

January 14, 2020         By: Steven Anderson

Venture capital involvement of late has been on the downturn a bit, probably because those who would be deciding who gets investment and who doesn’t were off enjoying the various holidays with their families. Now, however, they’re back in full swing, and new reports suggest that there’s something of a new epicenter for fintech—and mobile payments—investment. That epicenter may seem strange, but it makes sense when you think about it, as it’s none other than India.

India, according to word from TechCrunch via Tracxn, managed to land $14.5 billion in startup funding back in 2019, which was $4 billion more than it pulled in in all of 2018. Now, with the first week of 2020 down, Indian fintech operations managed to pull in $33.5 million in new funding in just six total deals.

Firms getting funding ran the gamut of services offered, ranging from a farming operation that used artificial intelligence to improve sustainability to a fresh entrant in India’s growing logistics sector. A security firm was also involved, who offered the novel possibility of limiting attacks on devices to just those devices, rather than having the attack spread across a network.

Two different microlenders were also featured in the fundraising furor, which should help drive some further investment in the field. After all, if lenders have more money, they can make loans themselves, which represents a concomitant gain in funding overall.

The best part about all this is that it demonstrates wonderfully the sheer range of use cases for mobile payments. It also demonstrates how many ancillary industries are involved in the mobile payments sector, from security to microlending and beyond. Perhaps best of all, it also demonstrates how much interest there is in this still comparatively new field, with investment flowing into the market on a regular basis. India is an underserved market as well, with the recent demonetization of its currency making alternate commerce products a valuable tool in the field.

Sure, it might be a bit too broad of a market, and we’ve already seen some firms shutting down in the face of growing competition. But this still-maturing market is seeing plenty of newcomers eager for their piece of the pie, even as mobile payments itself branches out into whole new market segments.