As the demand for fintech infrastructure providers increase, the Indian enterprise fintech market is expected to touch $20 billion in market size, a report from venture capital firm Chiratae Ventures and finance consultancy Digital Fifth said.
The demand for the enterprise fintech players is driven by the need for incumbents such as banks and financial institutions to deepen their reach through partnerships, provide tailor made solutions, improve underwriting and lending operations as well as to ensure compliance across their network partners in a fast-changing regulatory environment.
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Further, as the enterprise fintech market gains traction, it is expected to attract another $7-$8 billion in funding from risk investors until 2030, Chiratae said. “Risk investors are likely to put in another $7-$8 billion of investment into the fintech enterprise segment, as more unbundling takes place in the space,” said TCM Sundaram, founder, Chiratae Ventures told ET.
Sundaram also added that what is adding on to investor excitement towards the sector is capital efficiency of these models to create scaled business models without taking any risks on their own books.
Additionally, enterprise fintechs also have the ability to sell even to global geographies which makes them an attractive proposition.
“India is a torch bearer for many markets when it comes to fintech innovation. And if you see many domestic core banking systems or traditional fintechs have sold in Africa or South Asian markets,” Sundaram added.
Over the last two years between 2022 and 2023, the B2B enterprise segment has attracted close to $2.4 billion in funding, with a predominant concentration of these companies present across lending and banking verticals within Indian fintech, the report added.
In 2021, at the peak of the funding market, close to $2.02 billion was invested in the segment.
There is currently interest from incumbents to liaison with models across — banking-as-a-service, card management tool offerings, embedded finance, loan origination and management systems, and collection platforms, among others — in the enterprise fintech segment.
However, the wealthtech space hasn’t seen much entry of enterprise fintech players owing to strict regulations.
“Some of the areas that India could have adopted but didn’t happen was blockchain. We see that there are opportunities in that space for technology led partnerships with banks,” said Sundaram.