India’s 16 Fintech Unicorns

India’s 16 Fintech Unicorns

by May 24, 2022

Recently Kerala-based fintech startup Open Financial Technologies reached a US$1 billion valuation after closing a US$50 million Series D funding round. The round took Open Financial Technologies to unicorn status, joining India’s other 15 billion dollar fintech startups.

Founded in 2017, Open Financial Technologies is a high-growth neobanking startup serving small and medium-sized enterprises (SMEs). The company operates three main brands: Open, a business banking platform for SMEs; OpenBook, a digital banking platform for micro, small and medium-sized enterprises (MSMEs) in India; and Zwitch, a no-code embedded finance platform.

Open Financial Technologies’ US$50 million funding round, which was led by Mumbai-headquartered IIFL Finance and included participation from Singapore’s sovereign wealth fund Temasek, US hedge fund Tiger Global, and others, will be used to ramp up its leadership team and increase its headcount from 500 to 1,000 within the year.

The company is also gearing up for the launch of three news products in the SME lending space: Open Flo, a revenue-based financing product for e-commerce businesses; Open Settl, an early settlement credit offering; and Open Capital, a working capital lending offering. It has plans to expand internationally, targeting Southeast Asia, Europe and the US.

Open claims over 2.3 million SMEs on its platform, and says it is one of the fastest-growing SME-focused neobanking startup in the world, recording over 20,000 new SMEs joining its platform every month.

The success experienced by Open Financial Technologies is reflective of the rise India’s fintech industry has witnessed these past years, amid rapid digital adoption and COVID-19 restrictions.

To support these startups’ growth, investors ramped up their investments significantly in 2021, pouring U$4.6 billion in companies in the sector in the first eight months of the year, data from Inc24, a Indian media platform, show. The sum represents 5.8 times what was raised the same period the previous year.

Indian fintech funding, Source: Inc24

Indian fintech funding, Source: Inc24

India’s billion dollar fintech startups

Booming funding activity in the fintech sector in 2021 pushed valuations to new heights, turning a record of ten fintech startups into unicorns:

  • CRED (now valued US$4.01 billion), a credit card and rewards startup which reached a US$2.2 billion valuation after raising a US$215 million Series D in April 2021;
  • Digit Insurance (now valued US$4 billion), an insurtech startup that reached a billion dollar valuation after an undisclosed amount of funding in January 2021;
  • Upstox (now valued US$3.4 billion), a stock broking platform which closed US$24.7 million round in November 2021 at a US$3 billion valuation;
  • Groww, a wealth management startup that tripled its valuation to US$3 billion after closing a US$251 million round in October 2021;
  • BharatPe, a merchant payments and financial services provider which raised US$370 million in August 2021 at a US$2.85 billion valuation;
  • CoinDCX (now valued at US$2.15 billion), a cryptocurrency exchange that reached a US$1.1 billion valuation after closing a US$90 million Series C funding round;
  • CoinSwitch Kuber, India’s largest crypto exchange which raised US$290 million at a valuation of US$1.9 million in October 2021;
  • Acko General Insurance, an insurtech startup that reached a US$1.1 billion valuation after closing a US$255 million round;
  • MobiKwik, a payment services provider, which reached unicorn status after a secondary transaction in October 2021; and
  • Slice, a credit card startup that closed a US$220 million round at a US$1 billion valuation in November 2021.

The momentum is continuing this year with already three fintech startups reaching a billion dollar valuation in just the first four months of 2022. Besides Open Financial Technologies, these fintech startups that have joined the unicorns are:

  • CredAvenue, a one-stop shop for enterprise debt that raised US$137 million at a US$1.3 billion valuation in March 2022; and
  • Oxyzo, the financial services arm of business-to-business (B2B) e-commerce firm OfBusiness, which closed a US$200 million Series A in March 2022 at a US$1 billion valuation.

The 13 fintech startups that reached unicorn status in 2021 and 2022 joined the three companies that made it into the list back in 2020: Zerodha, a stock broker; Razorpay, a payment gateway for online payments now valued at US$7.5 billion; and Pine Labs, a merchant platform company providing financing and last-mile retail transaction technology valued at US$5 billion.

In addition to the massive expansion of its unicorn club, India also saw a number of high-profile exits in 2021. These included the acquisition of BillDesk, a payment gateway that went for US$4.7 billion, and the public listings of One 97 Communications, the operator of Paytm, one of the country’s biggest mobile wallets, as well as PB Fintech, the parent of insurance aggregator Policybazaar.com and digital consumer credit marketplace Paisabazaar.com.

 

Featured image credit: Edited from Pexels