Indian fintech firms mop up $1.93 bn in Q3

- Asian fintech companies surged 68% sequentially to $5.47 bn

- Volume of transactions also rose 21% to 216 deals

- Paytm, SoftBank planning to invest in series of fintechs in India

Bengaluru: India has emerged as the favourite destination in the Asia-Pacific region as far as investment in fintechs are concerned. Global consultancy firm S&P Global Market Intelligence said in a report that Indian fintechs raised $1.93 billion across 66 deals in the third quarter (July-September) of 2021.

During this period, investments in Asian fintech companies surged 68 per cent sequentially to $5.47 billion. The volume of transactions also rose 21 per cent to 216 deals, the report said.

According to the note, the growth in investments in APAC region's fintech companies was primarily on account of the rise in the number of transactions totalling $100 million in size. The shift towards digital channels has been accompanied by increased valuations, which may in part be driven by improved fundamentals, the report noted.

"Investments in fintech companies based in Asia Pacific reached a new quarterly high due to continued growth in mega transactions with at least $100 million in size. The growth in massive financing rounds has been accompanied by increased valuations, which may in part be driven by improved fundamentals as we see an accelerated shift toward digital channels. However, it may also reflect private investors' willingness to pay higher multiples due to their bullishness in the fintech sector. That said, newly-listed APAC-based fintechs have so far seen positive reactions from public markets, which may encourage more fintech investments in the region. In particular, we expect Southeast Asia-based fintechs to attract more capital as venture capitalists raise new money to double down on technology investments in the region," said Celeste Goh, fintech analyst at S&P Global Market Intelligence.

While consumer-facing payment apps have dominated funding into the payment sector in the past, business-to-business payment fintechs have been attracting more investors' attention of late, the report noted.

Going ahead, experts see the fintech landscape changing rapidly in India as digitisation of customers and merchants opens up new possibilities for players to provide financial services.

Meanwhile, post successful IPO of its portfolio company Paytm, SoftBank is planning to invest in series of fintechs in India. In recent months, fintech firms Paytm and PolicyBazzar had gone public, while MobiKwik is planning to raise funds through IPO soon.