Fintech

Payments space remained the strongest fintech sub-sector globally, attracting $53.1 billion in total investment, according to KPMG's 'Pulse of Fintech H2-2022' report. The sharp drop-off in fintech investment between the first half of 2022 and the second half -- from $119.2 billion to $44.9 billion -- highlights the rapidly shifting market conditions much more clearly.

This will be driven by unsecured small-ticket size segment and the secured collateral-based high-ticket size market, according to the latest white paper by Experian India in collaboration with the Digital Lending Association of India (DLAI). As co-lending becomes the predominant operating model in India, more traditional lenders will collaborate with fintechs to reach.

"We are privileged to have a great set of leading global investors, both existing and new, who believe in our mission of building massive technology platforms to bring at-scale financial and digital inclusion in India," Sameer Nigam, CEO and Founder of PhonePe.

In FY21, the company had posted a net loss of Rs 1,619.2 crore. Apart from the CCPS cost, the company's adjusted loss grew 2.2 times to Rs 828.2 crore in FY22, from Rs 227.3 crore in the earlier fiscal year, according to its financial statement with the Registrar of Company (RoC).

Nigam further stated that the challenges for startups shifting domicile to India are high, and that the move resulted in a loss of approximately $900 million dollars of accumulated losses, as it is treated as a restructuring event. Nigam also stated that at least 20 existing unicorns have expressed interest in shifting domicile to India if regulations become easier.

"General Atlantic is a really good blue chip global investor that has a long view on companies, which gives us the flexibility to be able to actually do at-scale investments in new sectors like insurance, lending, broking or ONDC," Sameer Nigam, Co-Founder & CEO, PhonePe, said.

Marquee global and Indian investors also participated in the round. The investment marks the first tranche of an up to $1 billion total fundraise that commenced in January 2023. The fundraise follows PhonePe's recently announced change of domicile to India and full separation from Flipkart.

This drop in funding can be attributed to the decline in late-stage funding from $8.3 billion in 2021 to $3.7 billion in 2022, a drop of 56 per cent, according to data provided by global software-as-a-service (SaaS)-based market intelligence platform Tracxn. Fintech startups recorded 13 funding rounds of $100 million+ in value. This is a massive drop of 50 per cent, from 26 rounds in 2021.

Last month, the company raised tranche 1 of Series D from MUFG, Japan's largest bank, along with existing investors Premji Invest, Motilal Oswal Alternates, NewQuest Capital Partners, and Mirae Asset Venture Investments. KreditBee said the additional capital raised will be deployed towards scaling the existing business and diversifying its product offering by venturing into digitally enabled financial products.

With over 40 million app downloads, the company is currently operating at an annualised disbursal run rate of $1.2 billion, managing assets under management (AUMs) of over $800 million.The current funding also saw participation from Tiger Global, Winter Capital and Evolvence.