Fintech Start-Ups See Fewer Incorporation In 2023, Survey By Growthpal Reveals

The survey by Growthpal found that the number of fintech start-ups that got incorporated in India in 2023 stood 72.6 per cent lower than 2021 and 55.55 per cent lower than 2022

Fewer fintech start-ups got incorporated in India in 2023, a survey revealed. The survey by Growthpal, a mergers and acquisitions (M&A) deal sourcing platform, found that the number of fintech start-ups that got incorporated in India in 2023 stood 72.6 per cent lower than 2021 and 55.55 per cent lower than 2022. 

As of 2023, about 20 fintech start-ups were incorporated in the country, against 45 start-ups set up in the preceding year, and 73 start-ups incorporated in 2021. The survey stated that the findings didn’t reflect the data for start-ups with under 10 employees, or those that don’t have a website or LinkedIn page, reported Business Standard.

Commenting on the survey findings, Maneesh Bhandari, Founder and CEO, Growthpal, said, “During 2020 and 2021, both regulators and founders gained insights into the capabilities and limitations of emerging fintech products. However, the subsequent introduction of new regulations and compliance measures across industries has created a challenging environment for launching new fintech ventures.”

The survey also found that about 30 acquisition deals took place in the Indian fintech sector in 2023, against 37 deals finalised in the preceding year. Notably, 29 deals took place in 2021. Some of the major deals in lendings included Yubi acquiring FinFort, IIFL Finance acquiring Bridge2Capital, and InCred Capital acquiring ORO Wealth, among others. 

From these 30 deals, a majority of 20 were conducted by large firms with more than 1,000 employees or funding of over $50 million. From these, six deals were made by firms with over 500 workers and a funding of more than $20 million. About five deals were finalised by smaller firms.

“In 2024, the trends that will dominate the fintech place include disruption by Artificial Intelligence (AI) in financial services, the rise of digital lending marketplaces through open banking and Application Programming Interface, and the increasing significance of sustainable solutions for fintech to address industry challenges and remain competitive,” Bhandari noted.