What would be the Impact of Angel Investing on the Fintech Sector?
Fintech - the amalgamation of finance and technology - is a term used to describe any business that utilises technology to provide automated financial services, such as online banking, money transfers, investment management, etc., to other businesses as well as directly to customers.
Conventionally, relegated to back-office support functions, the fast-growing fintech industry is estimated to cross $300 billion globally by the end of 2022. And, it has also caught the attention of investors - angel investor platforms, venture capitalists, global banks, investment management companies and so on.
Investment in Fintech
Private investment in startups has grown considerably in the past few years and fintech startups are receiving a major chunk of it. After finally cementing their place in the hot-for-the-taking innovation economy, fintech startups are attracting major money from investors for startups.
Global banks are propping up digital incubators and corporate ventures to acquire and invest in emerging fintech startups and solutions. Global tech companies, especially from the eastern hemisphere (away from the strict regulatory jurisdictions of the West) are marrying financial services into existing messaging super-apps with a massive user base. Major investors like Softbank have invested billions of dollars in direct-to-customer fintech companies.
Additionally, with the new-age fintech jargon, such as crypto assets, artificial intelligence, blockchain, neobanks, chatbots, etc., becoming investment buzzwords, fintech startups are poised to dominate the portfolios of private as well as corporate investors, especially angel investor platforms in India.
With 2022 seeing 21 unicorns till August 2022, angel investors in India are always on the lookout for the ‘next big thing’ to invest in. Further, with the launch of the Unified Payments Interface (UPI) and the massive success of the Digital India initiative, the fintech sector is ripe for growth and investments.
All this opens the playground for all types of investors for startups to invest in not just established fintech companies but also emerging fintech startups. It especially presents a unique opportunity for angel investors in India to capitalise on the hype and invest in fintech startups.
Angel Network Investments and Fintech Startups in India
All across the value chain, digitisation is a reality. While financial digitisation started way back in India, the Covid-19 pandemic truly spurred digital payments, online financial transactions and automated financial services. The relationship between financial services providers and consumers is moving to cell phones.
With the massive growth of digital payment applications, established banking and financial institutions have been forced to compete with digital-only payment and financial services apps and nascent fintech startups for customers.
With the fintech sector rapidly and continually evolving in India and digital financial transactions seeing an upward trend, fintech startups are cropping up and turning out to be the new attraction for angel investors in India.
The unprecedented growth of unicorns and the massive success of investors in India has developed a drive and gumption among angel investing platforms in India to back sectors that demonstrate a clear potential for growth and profitability.
Fintech startups are one such sector that has seized the attention of angel investors in India and will continue to benefit from not just the financial inflow but also the guidance, mentoring and experience of investors for startups in India.
If you are an angel investor in India looking to invest in startups - fintech or otherwise - and wish to receive curated investment opportunities and expert advice, you can join Venture Catalysts - World’s third largest early stage investor.
Also read: Reasons Why You Need An Angel Investment In India For Your Startup
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