India Beats China in Fintech Deals for the First Time Ever

Mumbai: The number of fintech deals in Indian start-ups surpassed those in China for the previous quarter, despite a slowdown in lending in India, according to a report. India saw 23 fintech deals during the second quarter of 2019, compared to 15 investments in China during the same period, according to The Global Fintech report from CB Insights, a global intelligence platform.

However, China had marginally higher investments at $375 million during the period, compared to the $350 million in India. China also saw deals drop to a new 5-quarter low of 15 deals, down 81% from Q2 of 2018.

Some large Indian fintech deals during the period include payments firm RazorPay, which raised $75 million in June led by Sequoia and Ribbit Capital, and digital insurance startup Acko, which raised $65 million from investors such as Flipkart co-founder Binny Bansal, SAIF Partners and others.

During the period, the US saw funding top a new quarterly high of $5.1 billion in Q2 of 2019. However, deals slipped to 143, the lowest point since Q4 of 2016. In Europe, the United Kingdom (UK) continued to lead as the top fintech market in Europe in 2019. Funding set a new quarterly record of $892 million, but deals dropped to 33 from 42 earlier.

The areas that fintech covers globally includes payments, insurance, lending, personal finance, wealth management, and blockchain/ cryptocurrency.

Over the next few quarters, fintech dealmaking is expected to continue at a strong pace in India, with at least 3-4 large deals underway, including at Cred, Lendingkart and Policybazaar.

However, broader deal-making has been relatively flat this year. Mint reported on July 22 that venture capital funding in start-ups globally decreased 2% compared to the previous quarter, with Asia slowing even as the US continues to see large-scale deal-making, according to a report from CB Insights along with consultancy firm PwC.

The slowdown in Asia also seems to be driven by a slowdown in China, where funding has slowed down after a record-breaking decade of funds raised, investments and valuations.

Bloomberg reported on 8 January that Chinese technology start-ups saw the slowest quarter in nearly three years, with 713 VC deals in the three months ended December, down 25% from a year earlier, citing data from market research firm Preqin. The amount invested in the quarter shrank 12% to $18.3 billion.

Further, TechCrunch reported last month that China’s deal-making activity for startups in the six months ended June halved from a year ago, as the amount invested in domestic start-ups during the first half of 2019 plummeted 54% to $23.2 billion.

Source: LM

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