E-comm sector gets backing of Indian investors with $2bn funding: Study

Chennai: Indian investors have preferred to put their money in the fintech sector this year, pumping in a little over $2 billion, a report has said.

According to investment tracking firm YourStory, the sector also saw the total number of funding deals this year reach 132 (as of last week), up from the 103 deals in 2017. Largescale corporate M&A deals are not part of the funding deals list prepared by the tracking firm.

Last year, the e-commerce sector topped the list in terms of investor funding in India, led by a series of mega funding rounds by domestic e-commerce major Flipkart. Flipkart was acquired by Walmart in a $16 billion corporate deal earlier this year.

This year’s total funding, however, was 13 per cent lower than last year’s $2.4 billion funding received by companies in the fintech sector.

Paytm led the table of companies which got top dollars in funding this year, with a $300 million fund infusion by global investment guru Warren Buffett-led Berkshire Hathaway.

Paytm had topped the list in the Indian fintech sector last year, with a mega $1.14 billion private equity deal with SoftBank.

The top 10 deals by value in fintech accounted for 60 per cent of total funding raised this year, reflecting the overall trend in investment in India that investors are taking pole positions in companies with a proven track record and the ability to scale.

Two of India’s newest unicorns also feature on the list. Insurance aggregator PolicyBazaar raised $238 million from Softbank in June at a valuation of more than $1 billion. Singapore-based Temasek, along with PayPal, invested $125 million in payments service provider Pine Labs, also taking its valuation over $1 billion.

A mix of payments, lending and insurance start-ups figured in the top 10 list this year, with tax service provider Cleartax among them with a $50 million Series B round funding.

Significantly, the number of deals amounting to $100 million and above rose to five this year, as against three such deals in 2017.

Lending firms in the fintech sector came across as the most active category, raising a total of $953.03 million, accounting for 46 per cent of the total deal value.

This year also saw the entry of CapitalG, Google’s investment arm, to the Indian market, with an initial investment in lending start-up Aye Finance.

NT Bureau