State of the Fintech Union 2023

Yashraj Erande Neetu Chitkara Vivek Mandhata Nisha Bachani Jinia Rao Soham Daruwala Mithun Nair Havisha Gupta Vikram Vaidyanathan Anish Patil Anand Khetan Taha Tinwala

Indian Fintech stands at the forefront of global growth, ranking as the third-largest and one of the fastest-growing Fintech markets worldwide in terms of funding, deal volumes, and Fintech strength. The ecosystem has transitioned into a pivotal "middle phase" of its growth journey, showcasing remarkable resilience.

In H1 CY23, Indian Fintech rebounded from a funding winter with a 30% surge in capital momentum, outperforming the global growth rate of 8% observed in H2 CY22.

India's distinctive digital public infrastructure has been a catalyst for innovation, fostering Fintech's ascent. Business fundamentals are strengthening, with diverse Fintechs achieving growth milestones at an accelerated pace, and profitability is emerging in both private and public markets.

Our survey of 70+ Fintech Founders/CXOs reveals a positive shift towards profitability, with expectations of reaching 40-60% in 2023, up from 20-30% in 2022. Moreover, Fintech is evolving from competition to collaboration, with over 65% of Fintech CEOs prioritizing partnerships. Incumbents are investing heavily in digital capabilities, while challengers seek operational efficiency within the regulated environment. Regulators are increasingly supportive, with dedicated Fintech departments and guidelines to facilitate operations and manage risks.

Indian Fintech revenues expected to grow at 35%+ annually to reach $190B+ revenues by 2030. In the evolving Indian Fintech landscape, key priorities include: focusing on fiscal prudence and sustainable profitability, harnessing emerging technologies like GenAI for functional solutions, establishing a clear policy framework defining roles and responsibilities, fostering private innovation within DPI 2.0 for inclusion, and seizing growth opportunities in embedded finance, BaaS 2.0, CBDCs, and contextual lending.