NEXT YEAR WILL SEE A HUGE INCREASE IN SETTING OF STARTUPS:
Covid has adversely impacted the livelihood across all segments and levels. We see many of these impacted people focus on building their own start-ups in 2021 as they see newer opportunities.
We believe that this year may be the biggest in terms of the number of startups coming up. This trend is already visible with a large number of industry seniors stepping out of their organizations for setting up their own businesses.
GOING WIDE ON PRODUCTS AND SEGMENTS:
Most Fintechs started their journey by deeply focusing on one product and segment.
This established them as a leader in their own areas like Point of Sale, Payment Gateway, Buy Now Pay Later, Personal Loan products.
However, lack of scale and monetization opportunities within these segments has pushed all these players into newer products and segments.
We will see a bit of overlapping and confusing ecosystem now, with every player trying to add adjacent products or reach out to newer segments. This would make it difficult to map the competitors and would also affect the brand positioning for these players. Hopefully, a clear focus on maximizing the offering for a customer base will help them in moving toward scale and profitability.
MARKET GETTING READY FOR INTERNATIONAL STARTUPS:
In the last couple of years, India has seen the entry of many international startups, which are in different stages of expansion. However, many of these players have closed their business due to Covid related challenges as well as due to lack of understanding of the market.
We believe that the Indian B2B market is ripe for expansion as the banking sector is now exposed to the value of fintech within India and has seen international startups in events across the world. We will see the entry of another 40 to 50 startups in the following areas:
- Core banking platforms
- API Platforms
- Underwriting Platforms
- Digital Engagement Platforms
- Wealth Platforms
- CRM Platforms
There may not be much value for international startups to enter B2C business due to challenges with localizations as well as excessive competition.
INDIAN STARTUPS INITIATE THEIR INTERNATIONAL EXPANSION:
With a lot of startups raising Series B or beyond funding, they will look at international markets for expansion. We believe that the Middle East and South Asia would be the best market for Indian startups due to proximity as well as similarity in market expectations. More than 10 startups in the Payments/ KYC / Regtech business will set up a base in the Middle East and will pave way for bigger engagement in the ecosystem.
South East Asia will be an area of focus for startups in B2B Lending / KYC / Regtech due to the potential of scale in the market. We have seen B2B startups like Perfios, Kuliza making their presence felt in these markets.
US and Europe would become more relevant for Indian startups in the year 2023 and beyond. This delay is linked to the heavy investment required to enter these markets and the lack of business experience of our startups in this geography.