Funding Winter: IFSCA To Start Giving Grants To Indian Fintech Innovators From Early Next Year

IFSCA Chief Technology Officer Joseph Joshy said that Indian Fintechs have started applying for the IFSCA Fintech Incentive Scheme, 2022, which has six types of grants.

Funding winter is a term widely used by the industry for funds slowing down for the widely encouraged and promoted startups.

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The International Financial Service Centre Authority (IFSCA) will start giving fintech grants to Indian innovators from early next year, reported PTI. IFSCA Chief Technology Officer Joseph Joshy said that Indian fintechs have started applying for the IFSCA Fintech Incentive Scheme, 2022, which has six types of grants. 

On the sidelines of the Singapore Fintech Festival (SFF) held 2-4 Nov 2022, he said, “We have an external committee which will be looking into these applications. Probably, from early next year, the grants will start flowing.”

According to the PTI report, this is at a time when start-ups are facing "funding winter". Funding winter is a term widely used by the industry for funds slowing down for the widely encouraged and promoted startups.

Joseph Joshy said that the grants are for bootstrap innovators, and range between Rs 15 lakh to Rs 75 lakh. He added that the grants are timely but cannot be compared to Venture Capitalists' investment sizes that run into millions of dollars.

Industry observers at SFF are saying that the funding winter will see some 50-60 per cent of the startups, including Fintechs, facing a bleak future. They added that this funding winter is worsening by the US recession. They are Hoping that the impact of this funding winter would not be as bad as the Dot.com crash of 2001.

Julie Fergerson, CEO and co-founder of the Seattle-headquartered Merchant Risk Council, believes the start-up network will go through a correction. “There is an industry-wide correction as some of them are overvalued,” she said. 

People are already finding it difficult to raise funds and some of their start-up valuations are sky-high, said Poorna Nayak, co-founder of Bangalore-based startup EnrichVideo. “People will have to tone-down their expectations because funding won't come easily. Investors' focus will be on profitability from now on,” Nayak said.

Market sources believe that less than 5 per cent of the start-ups have succeeded to a certain level, while 80 per cent of the start-ups are displaying weak models, according to the report.