Chennai: While edtech and e-commerce dominated PE-VC investments in the first wave of the pandemic, 2021 has brought an unlikely leader in banking, financial services and insurance as conventional NBFCs and startups Technology-powered loans accounted for 54% of the total PE-VC funding raised from January to March. The BFSI sector raised nearly $ 6.4 billion in investments in the first three months of 2021, compared to just $ 697 million in the same quarter last year. Driven by distress deals and the investment frenzy of fintech players, private lenders (classic NBFCs and fintech platforms) raised nearly $ 6.1 billion in funding in the first quarter of 2021. The agreement of $ 5.2 billion between Piramal Group and Dewan Ares SSG’s $ 380 million investment in Altico Capital led the pack, making the industry an outlier in the quarter. Among the venture capital deals, NBFC Five Star Business Finance has raised $ 234 million from existing investors Sequoia Capital India and Norwest Venture Partners and new investors KKR and TVS Capital, turning a unicorn. Fintech actor KreditBee raised $ 70 million in February and $ 75 million in January from high profile investors to close over $ 150 million Series C round, one of the largest for a startup loan. Interestingly, the startup also gave its Chinese investors – Shunwei Capital and Xiaomi – a full exit with this. Gold lending platform Rupeek also continued its run with a $ 33 million Series E fundraiser led by GGV Capital. Arun Natarajan, founder of Venture Intelligence, said distress deals struck by deep-pocketed global and local investors and growth capital raised by NBFCs and savvy fintech players dominated the pack in the first quarter due to waiting for an economic recovery.
“While B2B companies attract private investment, small business lending platforms are also attracting the attention of investors and emerging pioneers in this segment,” he added. Madhusudan E, co-founder and CEO of KreditBee, believes that personal finance should “go from a luxurious aspiration to a trivial commodity” available at the click of a button. “A complex demographics like India require simple, effective and impactful lending solutions that come with a deeper understanding of the ecosystem’s consumer financing needs,” he said on closing. of his recent round.
A recent report from the Boston Consulting Group and FICCI predicts that India is on track to register a valuation of the FinTech sector of $ 150 billion to $ 160 billion by 2025, which will translate into potential for additional value creation of approximately $ 100 billion. “To meet this ambition, the Indian fintech sector will need investments of 20 to 25 billion dollars over the next five years,” he added.