Investment by private equity (PE) and venture capital (VC) firms in payment and lending tech firms hit its lowest in two years, showed a Reserve Bank of India (RBI) Innovation Hub report. Total investment to lending tech companies stood at Rs 2,133 crore in the first of 2024, as against Rs 12,113 crore in the first half of 2022, it said.
During the same period, investment to payment companies fell to a mere Rs 217 crore from Rs 6,270 crore.
The RBI report also showed that the number of deals in lending to tech space nearly halved to 26 from 50, whereas the same in the payments industry fell to four in 2024 from 20 deals in 2022.
On the other hand, fintech SaaS companies received investments worth Rs 883 crore in 2024, compared to Rs 1,729 crore in 2022. The number of deals also halved to eight in 2024 from 15 two years back.
The report also showed that investments to insurtech companies were at Rs 111 crore versus Rs 350 crore in 2022. The number of deals too fell at four compared to 15 during the same period.
Deals in BFSI
According to the RBI report, Indian banking, financial services and insurance (BFSI) companies attracted Rs 2.59 lakh crore between 2020 and H1 2024 from PE-VC investors. Within the BFSI, non-banking financial companies (NBFCs) have attracted the most PE-VC funding in recent years.
“During the period spanning 2020 to H1 2024, NBFCs attracted Rs 88,708 crore across 162 deals, followed by payments-related companies, which attracted Rs 41,797 crore across 113 deals.
BFSI companies attracted 76 PE-VC investments worth Rs 23,429 crore during H1 2024, compared to Rs 30,315 crore in H1 2023.
Within the NBFC space, auto finance, education loans, SME and MSME loans, vehicle loans, personal loans), housing finance companies and microfinance institutions saw highest number of deals. The largest investment was the Rs 4,630 crore buyout of Shriram Housing Finance by Warburg Pincus, followed by Rs 1,930 crore investment in Svatantra Microfin.
Exits by PEs and VCs
In H1 2024, the exit value of financial services companies stood at Rs 26,340 crore. Most financial services exits during the period were through the sale of stakes in mature companies via the public markets. The largest BFSI exit was Bain Capital’s complete exit of Rs 3,579 crore from Axis Bank through public market sale, the report said.
Within the fintech space, Temasek Holdings' exit from PolicyBazaar was the biggest at Rs 2,417 crore.
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