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Funding February, 2021 Digital Payments Digital lending

INDIA FINTECH FUNDING – FEB’21

The month of February saw 13 startups raise a total funding of $253million, with the highest being raised by BharatPe

The India Fintech Funding saw a huge push in the month of February with 13 startups raise total funding of $253 million, not including the debt funding raised by lending startups ProCap and Eduvanz. The highest amount of India Fintech Funding was raised by BharatPe, a payments startup that raised $108 million as a part of its series D funding round. BharatPe is India’s largest offline acquirer of merchants. It is a pioneer in UPI-based Payments and has developed an interoperable QR code that can be used by merchants to accept payments through any UPI payment app. The Startup is currently valued at $900 million and is all set to join the unicorn club in India.

BharatPe, Startup Funding, Fintech Funding

The Funding in BharatPe was led by investor Coatue Management, a global technology-focused investment manager led by Founder and Portfolio Manager Philippe Laffont.

The Second Highest funding was bagged by KreditBee, a digital lending startup focused on the salaried class. The startup raised $75million as a part of its series C round. The round was led by PremjiInvest, India’s largest single strategy fund that has built up positions and funded around 40 publicly listed and private companies. This funding was raised to enable Finnov, the parent company of KreditBee to cut its backing by China-based investors. The china based funding, which was around 40% earlier, has been reduced to about 10%.

This month’s funding rounds also saw the participation of investors like Accel, Lightspeed, Sequoia Capital, Matrix, Hummingbird Ventures, Ribbit Capital etc. We also saw 2 banks invest in fintechs this month. IndusInd Bank led a $10million Round for lending fintech Kinara Capital through a 100 percent guarantee from the US International Development Finance Corporation (DFC), and ICICI Bank acquired 9.65% Stake in Thillais Analytical Solutions That Operates Neo-Banking Platform ‘Vanghee’

The Digital lending segment bagged the highest amount of funding this month, raising $116 million, followed closely by the Payments segment which raised $110million.

The Digital lending segment has attracted a good chunk of funding over the last couple of years across both the retail and SME lending space. Although this segment has seen some tough times due to COVID, NPAs, changes in E-KYC processes, and increasing regulatory scrutiny, we still expect to see multiple unicorn startups come up in this segment as stronger players continue to gain traction. This segment has now reached a maturity stage with established ones expected to grow well and capital deprived ones either closing down or merging with banks / stronger fintechs.

The Payments segment raised a funding of $110 million, the majority of this amount was raised by BharatPe. The B2B payments segment has done well over the last few years across POS and Payment Gateway segments with leaders building scalable business models. This segment has primarily depended on Merchant Discount Rate (MDR) for their revenues. But as the country moves towards lower MDR models, the players in this segment will be adversely affected. Almost all payment startups have started cross-selling lending and banking products in order to make their business model viable. The India Fintech Funding is expected to increase multifolds in coming years

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