Startup Street: Covid-19 Fails To Dampen Fintech Investments In India

This week on Startup Street, a look at how the Covid-19 crisis has impacted fintech funding in the first half of 2020. The IIT Alumni Council says it’s setting up six research centres for startups across the country. And a famous Indian cricket commentator backs a fantasy gaming startup. Here’s what went on:

Fintech Investments Remain Solid In India

Investments in India’s financial technology firms continued to grow in the first six months of 2020 even as the Covid-19 pandemic sent economic activity tumbling.

Fintech investments till June 2020 more than doubled over the same period last year to $1,700 million, according to KPMG’s bi-annual Pulse of Fintech report. While fintech investment is down on a quarterly basis, the 134% year-on-year rise suggests that India will remain a major opportunity for investors in the long term, the report said.

“Covid-19 has in fact fast-tracked the digital economy and significant investments are being made by established banks and insurance companies, which can also lead to acquisition and more investments from investors,” said Sanjay Doshi, head of Financial Services Advisory at KPMG India.

Three big fintech deals during this period made the headlines: a $398 million angel investment in Navi Technologies led by Flipkart co-founder Sachin Bansal, a $300 million fundraise by Pine Labs and the $185 million acquisition of PaySense by Netherlands’ PayU. Bengaluru-based Navi’s angel investment, was in fact, among the top 10 biggest fintech deals in the world during this time.

This bodes well for India’s digital payments market which KPMG predicts to be valued at Rs 4,323 lakh crore by 2023-24.

That said, the fintech environment—particularly the payments space—in India did face hurdles due to the pandemic. “The downward impact of Covid-19 on the payment landscape has been profound and significant, yet not irreparable,” KPMG said in a prior report.

Yet, in some ways, it has also been a silver lining for the sector. “The disruption caused by the pandemic allowed businesses the bandwidth to step back and reconsider their payment protocols for the inclusion of digital from a streamlining and ease perspective,” KPMG said.

“Also, individuals were inclined to consider digital payments in lieu of prevention to physical access to their funds,” it said.

It wasn’t all roses for fintech investment globally. KPMG said deal activity came to a grinding halt and most of the completed deals were actually pending ones from 2019. Mergers and acquisitions dried up with most deals coming in the venture capital space, the report noted.

Going forward, Covid-19 could turn an active driver for fintech investment in the second half of the year, KPMG noted. “The ongoing acceleration of digital trends will drive investment not only in direct fintech solutions but in all of the enabling technologies, such as cybersecurity, fraud prevention and digital identity management.”

IIT Alumni Council To Set Up Six Research Centres For Startups

The Indian Institute of Technology’s alumni council will set up six research centres to make modern equipment and research tools in six cutting-edge domains available to startups registered with its MegaIncubator initiative.

The council is building the world’s largest Covid-19 testing lab in Mumbai called MegaLab.

The proposed research centres are in engineered biomolecules, quantum technologies, nuclear sciences, imaging, electric transportation and fintech, the council said in a statement.

Domain experts and venture capitalists from the council will be the mentors and guides to help reach commercialisation goals, it said.

MegaLab, on completion by the end of September, will have the capacity for 1 crore tests per month for Covid-19 and other infectious diseases like tuberculosis.

While an engineered biomolecule centre will come in the Kalina Campus of Mumbai University, the quantum technology research centre will be in the Delhi-NCR and the fintech research centre will be co-located with BSE Institute in south Mumbai.

Startups can register with MegaIncubator in addition to their host incubator to connect with partner incubators and affiliate research centres, it said, adding the other research centres will be either collocated with or be established in the vicinity of existing government and academic institutions that specialise in these areas.

All the proposed research centres will be operational next year.

Harsha Bhogle Backs Gaming Startup Fantasy Akhada

Cricket commentator Harsha Bhogle has invested an undisclosed amount in gaming startup Fantasy Akhada, and will be the brand’s face for the next two years, the company said on Sept. 4.

Fantasy Akhada founder Amit Purohit said the onboarding of Bhogle as an investor will boost subscribers’ confidence towards the platform, while the startup will continue building technology to serve the gamers on the platform.

“I have realised that during a cricket match, everyone wants to join the game,” Bhogle was quoted as saying by PTI. “While limited people can play on the ground, several fans engage in the game online through various sort of games. There fantasy gaming is growing and it is good to invest in something which is growing.”

The company did not disclose the investment details.

“Besides the growth potential, I like to work with young people who want to make a difference in society with their energy,” Bhogle said. “I was comfortable with people involved in Fantasy Akhada hence I decided to make an investment in the platform.”

Founded in January 2020, Fantasy Akhada claims to have gained around 1 lakh customers in the last 8 months.

“We have a lot of active users. We are very focussed on activities that we do for retention of users. People want to quick withdrawals of their rewards otherwise they become restless and retaining them becomes a challenge,” Purohit said. “We want to focus on retention of users and with Harsha coming on board credibility factors go up significantly.”

He said the company has been monetising service since the beginning of the platform.

With inputs from PTI.