Venture capital-backed investments in India’s fintech sector outpaced those in China in the first quarter of 2020 in terms of both deal value and volume, according to data and analytics company GlobalData.
The global economic turmoil caused by covid-19 has diminished the investment appetite for fintech startups in 2020. China, in particular, has been hit hard by the pandemic.
Over the last two years, China’s fintech startup ecosystem survived as the breeding ground for VCs. However, the trend reversed with Indian fintech startups attracting more investment in the March qurater.
“In Asia, though there is an overall pullback in VC funding of fintech startups in Q1 2020, India grabbed the top spot as China was hit by the pandemic-induced economic recession” said Ayushi Tandon, fintech analyst at GlobalData.
Indian fintech startups attracted VC investments of more than $330 million in the March quarter against China’s approximately $270 million. In terms of deal volume too, the number of VC investments in India stood at 37 while China managed to close only 26 deals, according to GlobalData’s database.
Startups in the payments and lending sectors led the number of investments in India, whereas China’s deals were more in cross-sector fintech startups. Fintech startups in the analytics tech area represented the highest number of deals in India as well as China.
In February BharatPe, a New Delhi-based startup that is helping merchants to accept digital payments for the first time and also providing them with access to working capital, raised $75 million in a new financing round. In March, fintech startups Veritas Finance and Bengaluru-based Juspay raised $46.99 million and $21.6 million, respectively. Earlier in January, MoneyTap, a consumer lending company, raised $70.26 million in Series B funding.