6, Feb 2024
Indian Enterprise FinTech Industry Projected to Reach USD 20 Bn by 2030
India, February 6th, 2024: Chiratae Ventures, in collaboration with The Digital Fifth, has released a comprehensive report titled ‘Unlocking Indian Enterprise Fintech Market.’ As per the 2024 FinTech Sector report, Enterprise FinTechs are poised to expand, with projections estimating a market size of approximately USD 20 billion by 2030. This report focuses on Enterprise FinTechs that play a pivotal role in streamlining product, sales and service delivery as well as enhancing efficiency within the BFSI segment in six essential sectors: BankingTech, LendingTech, PayTech, RegTech, InsurTech and WealthTech.
Sudhir Sethi, Founder and Chairman, Chiratae Ventures on the launch of the report, shared, “Chiratae projects the Enterprise FinTech industry to be over $20 bn opportunity by 2030, and with FinTech being a focus area, we are keen to work with founders transforming India’s Financial Services. Chiratae has a successful history of investing in innovative category builders in FinTech, such as Fibe in Consumer Credit, Vayana Network in Supply Chain Financing, GetVantage in Revenue Based Financing, PolicyBazaar in Insurance distribution, to name a few. With our cumulative learnings and experiences with the traditional Financial Services as well as FinTechs, we are excited to share our insights via this Enterprise FinTech report.”
The Enterprise FinTech Opportunity
The BFSI industry is undergoing a rapid transformation amidst demand for lower costs, scale, innovation, and agility. Instead of banks viewing technology as a cost centre, the thought process has started to realign, and it is now being seen as a driver to manage profit and loss as well as reduce the cost-to-income ratio. Investment in technology across financial segments is expected to witness high growth over the coming decade. The backbone of this digital innovation is revolutionary with public infrastructure like the India Stack, Account Aggregator, ONDC, KYC and DBU regulations. The recent Digital Personal Data Protection Act (DPDP) of 2023 will also push financial institutions and their partners to reorient their architecture and business for better data governance.
This digitisation has led to the growth of Embedded Finance platforms and increased investments in API-enabled infrastructure. This shift towards Embedded Finance providers is creating an opportunity for Anything As A Service i.e. XaaS. Banking (BaaS), Lending (LaaS) and Payments (PaaS), have already emerged as key areas of investment for VCs. Digitisation is underway in the retail business for Saving Accounts, Credit Cards and Personal Loans and has just begun for the MSME and Corporate segments. According to the report, banks and NBFCs will evolve to become fully digital for the Retail and MSME segments in the next 10 years.
TC Meenakshisundaram, Founder and Vice-Chairman added, “Financial Sector Enterprises are at a cusp of digital transformation, and with regulators’ continued support, FinTechs building technology-led solutions will play a pivotal role and capture this burgeoning opportunity. We expect Chiratae to play an active part in the Enterprise FinTech space in the coming four to five years.”
Changing technology landscape across Enterprise FinTech
Large banks have started investing heavily in technology and are focusing on scaling their digital business which is being replicated by small and mid-sized banks. FinTechs and Embedded Finance players are driving customer engagement in partnership with banks, and this digital push is gradually expanding to complex business banking, including Trade Finance and Treasury. Meanwhile, regulatory frameworks around Digital Lending have continued to evolve and are positively influencing technology spend by lenders. Lenders are experimenting with innovations like Pre-Approved Loans, B2B BNPL, Supply Chain Finance, Secured Credit, etc.
India is swiftly transforming into a less cash economy and will aim to eliminate it over the next decade. Payments innovations have been driven by regulatory initiatives and there will be a demand for agile Payment as a Service (PaaS) platform to orchestrate transactions with multiple bank payment infrastructures. Factors like the Government’s Digital India initiative, India Stack APIs and the regulator’s focus on consumer protection have driven demand for RegTech solutions, ensuring compliance, data security and seamless transactions across the FinTech ecosystem. India’s Wealth Management sector is experiencing growth with increasing asset classes, new entrants, and tech investments. The country has shifted to an investment mindset, with a declining focus on traditional physical assets. India is the 9th largest Life Insurance market globally and is expected to reach USD 200 bn by 2027. Technological advancements such IoT, telematics, and surveyors boost trust in insurance, reduce fraud, realign workloads, and improve decision-making in claims and underwriting.
Sameer Singh Jaini, Co-Founder and CEO, The Digital Fifth said, “The tide of change is upon us, and it’s happening right now. The last decade witnessed a continuous influx of funds into Enterprise FinTechs. This, coupled with the entry of new-age players in various Enterprise segments, is shedding light on the previously untapped potential of this market. The distinctiveness of this sector lies in its capacity for multiple contenders to drive the market. Every breakthrough in this sector ripples through the BFSI realm, advancing it tenfold.”
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- By Rabindra
14, Dec 2023
Chiratae Ventures Launches the Annual Report Highlighting the Intricacies of the Consumer Tech Sector
Indian ConsumerTech Industry to reach USD 300 Bn by 2027, says Report by Chiratae Ventures, 1Lattice, and Google
- Digital public infrastructure and population scale solutions play a major role in unlocking India’s consumer potential.
- The key success factors for scaled impact in the ConsumerTech industry are product innovation, vertical integration, omnichannel strategies, and the globalisation of scaled products.
Bengaluru, 14th December 2023: The Indian ConsumerTech industry is set to rise as the total addressable market will reach ~USD 300 Bn, by 2027, growing at a CAGR of ~25%. Chiratae Ventures, in collaboration with 1Lattice and powered by Google, has unveiled “Cracking the Code: Unveiling India’s Consumer Landscape,” the first instalment of a three-part Annual Report series.
The report combines secondary research and primary surveys conducted with respondents nationwide. It delves into trends within the consumer tech industry and provides in-depth analyses of gaming, e-commerce, fintech, entertainment, and healthcare sectors.
Digital public infrastructure and population scale unlocking India’s consumer potential
The unlocking of India’s consumer potential is driven by digital public infrastructure and population-scale solutions. Over 500 million Indians now seek entertainment and gaming services on a daily basis, Over 1.2 B people in India need good healthcare, and ~1.1 Bn people have a bank account and seek to invest in financial services. ~880 Mn people in India aspire to spend on fashion and apparel, and ~220 Mn people in India aspire to spend on on-demand services. This has resulted in an increased focus on personalization, a rise in experiential retail and a growing influence of social media. Supported by an increase in disposable income, and significant digital adoption they provided additional tailwinds to solve for the above needs.
Emerging trends such as social commerce, immersive shopping experiences, and mobile gaming are reshaping the global consumer landscape, impacting regions including the US, Europe, APAC, and MENA. Not to be left behind, the Indian Consumertech sector is experiencing swift rise of over-the-top (OTT) services on the subscription side, an increasing involvement of women in gaming, commerce and social media, and a notable rise in green mobility solutions such as EV sales.
The current Total Addressable Market (TAM) of the ConsumerTech industry is valued at ~USD 100 Bn, with the dominant sectors being mobility (30% share of the market) which includes ride-hailing apps, automobile marketplace and online car rental market followed by entertainment (25%) which includes print, digital, and television media. By 2027, fashion is expected to overtake entertainment as the second leading sector with apparel and accessories, beauty and personal care, footwear, jewellery, and watches.
Sudhir Sethi, Founder and Chairman of Chiratae Ventures, on the launch of the report, shared, “Chiratae projects the Indian consumer industry to be $300 B revenue by 2027. We have till date invested ~$450 Mn into the sector. Key winners backed by Chiratae include Flipkart, Myntra, Cult.fit, Firstcry, Lenskart, GlobalBees, Policybazaar, PlaySimple, Curefoods, Fibe, Rentomojo to name a few. We believe that ConsumerTech sector is both a horizontal and a vertical play with winners at the intersections of horizontal technology disruption and vertical domains such as Health, Finance, Education, Agriculture etc. We continue to invest in companies such as Agrostar, Healthifyme, Miko, Artium, and a new breed of consumer deeptech companies such as KBCols, Aether as well. With our learnings and experience in this sector, we are proud to release our ConsumerTech sector report, the first in a 3-part series that captures deep insights.”
“Digital today is ubiquitous and its usefulness is increasing every day. With a plethora of information, services, and options now available to people at their fingertips, consumers are looking for personalized digital experiences. These consumer expectations extend to Tier 2+ consumers who have embraced technology and have an even greater openness to experimentation with new brands and products, and the willingness to spend on personalization and premiumization. The rapid evolution of AI presents an incredible opportunity for businesses to engage with their consumers in newer, more meaningful ways that deliver effective purchase outcomes whilst also responding to their need for privacy,” said Roma Datta Chobey, Managing Director – Digital First Businesses, Google India
Decoding the Indian Consumer
Growing digital adoption in India has led to increased smartphone usage, higher digital spending, and a rapidly scaling shift from offline to online.
India’s lower-income and Tier II and III cities are rapidly adopting digital technology and are aware of the various platforms/apps.
As per the survey findings, consumers, on average, dedicate over four hours daily to their smartphones. The fintech apps dominates usage, with 77% of respondents leveraging it, primarily due to robust security features and a user-friendly interface. Following closely, entertainment apps capture a significant share at 70%, with on-demand services being perceived as essential expenses in the daily lives of about 70% of consumers.
Gaming, e-commerce, and healthtech are also gaining traction among Indian digital consumers. Online and professional gaming is on the rise in India, with an increasing number of active female gamers (~60%). The growth of the e-commerce sector is seen due to the shift from offline to online channels for apparel and groceries because of the discounts and offers available. Lastly, healthtech is growing at a CAGR of ~40%, with online pharmacy being the most used platform in metro and Tier I cities.
Roma Dixit, Director, Financial Services, 1Lattice, sums up the ConsumerTech industry, “This report delves into India’s ConsumerTech trends, emphasizing five pillars: population scale, product innovation, digital infrastructure, vertical integration, and omnichannel presence. With a current market worth $100 billion and an expected surge to $300 billion by 2027 (CAGR 25%), India’s consumer tech isn’t a fleeting but a substantial force. This growth potential is underscored by the ambitions of Indian homegrown startups, driven by robust revenue growth and eyeing global expansion, fuelled by an ever-growing digital native user base.”
