Minicorns, Unicorns tripled in USD 100 billion Indian fintech ecosystem: BCG, Z47
Aug 30, 2024, 13:22 IST
New Delhi: The Fintech ecosystem of the country now cumulatively valued at over USD 100 billion, is at a pivotal stage of evolution, with the potential to create two to three times its current value over the next decade, as per a report by BCG and Z47.
The report highlighted that India remains one of the top three global Fintech destinations, with the ecosystem witnessing exponential growth across all levels.
It added that over the past four years, the number of Minicorns (valuation at least USD 1 million but less than USD 1 billion) in the country has increased by 3.5 times, while the number of Unicorns and Soonicorns (startup that is growing quickly and has the potential to become a "unicorn" valued at USD 1 billion) has tripled.
The report noted that in 2023, the country's Fintech market achieved a revenue size of USD 25 billion, marking a 56 per cent year-on-year growth which is a remarkable contrast to the global Fintech growth rate of just 13 per cent during the same period.
However, the report also added that despite generating over USD 100 billion in value within the last decade, Indian Fintechs are still considered to be in the "middle" phase of their development, especially when compared to traditional incumbents who have created USD 600 billion+ in value over 30 to 50 years.
The report mentioned that now the growth and the further expansion of the fintech ecosystem in the country is expected to come from the Tier 2 cities where majority of the Indian population resides.
"With 63 per cent of the Indian population outside the top cities, huge opportunity exists to serve Bharat with next wave of penetration expected to come from Tier 2 cities" the report added.
As Fintechs mature, profitability has become a central focus across the sector, with over 40 per cent of founders and CXOs (Chief Experience Officers) prioritizing unit economics alongside market expansion. Those preparing for or currently undergoing the IPO process are increasingly emphasizing governance, investment in infrastructure, and security.
The report noted that in a recent survey of over 60 executives from top Fintechs, the majority cited market share expansion and growth as key priorities, especially for early and growth-stage companies. Post-IPO stage Fintechs, however, are placing greater emphasis on profitability and investments in technology, infrastructure, and security.
"Mature Fintechs preparing for or in the IPO journey are emphasizing governance, investment in infrastructure, security Across survey of 60+ Executives of top Fintechs, market share expansion & growth emerged as priorities for early and growth stage" added the report.
However, the industry is not without its challenges, particularly in the realm of cybersecurity. Over the past two decades, more than USD 20 billion has been lost to cyber and digital attacks.
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The report highlighted that India remains one of the top three global Fintech destinations, with the ecosystem witnessing exponential growth across all levels.
It added that over the past four years, the number of Minicorns (valuation at least USD 1 million but less than USD 1 billion) in the country has increased by 3.5 times, while the number of Unicorns and Soonicorns (startup that is growing quickly and has the potential to become a "unicorn" valued at USD 1 billion) has tripled.
The report noted that in 2023, the country's Fintech market achieved a revenue size of USD 25 billion, marking a 56 per cent year-on-year growth which is a remarkable contrast to the global Fintech growth rate of just 13 per cent during the same period.
However, the report also added that despite generating over USD 100 billion in value within the last decade, Indian Fintechs are still considered to be in the "middle" phase of their development, especially when compared to traditional incumbents who have created USD 600 billion+ in value over 30 to 50 years.
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"With 63 per cent of the Indian population outside the top cities, huge opportunity exists to serve Bharat with next wave of penetration expected to come from Tier 2 cities" the report added.
As Fintechs mature, profitability has become a central focus across the sector, with over 40 per cent of founders and CXOs (Chief Experience Officers) prioritizing unit economics alongside market expansion. Those preparing for or currently undergoing the IPO process are increasingly emphasizing governance, investment in infrastructure, and security.
The report noted that in a recent survey of over 60 executives from top Fintechs, the majority cited market share expansion and growth as key priorities, especially for early and growth-stage companies. Post-IPO stage Fintechs, however, are placing greater emphasis on profitability and investments in technology, infrastructure, and security.
"Mature Fintechs preparing for or in the IPO journey are emphasizing governance, investment in infrastructure, security Across survey of 60+ Executives of top Fintechs, market share expansion & growth emerged as priorities for early and growth stage" added the report.
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Notably, the report stated that the profitability outlooks are improving year-on-year across all segments, with Neobank and InsurTech showing the most significant positive shifts since 2022.However, the industry is not without its challenges, particularly in the realm of cybersecurity. Over the past two decades, more than USD 20 billion has been lost to cyber and digital attacks.