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Fintech deals showing new promises : India beats China

The number of fintech deals in Indian start-ups surpassed those in China for the previous quarter, despite a slowdown in lending in India, according to a report. India saw 23 fintech deals during the second quarter of 2019, compared to 15 investments in China during the same period, according to The Global Fintech report from CB Insights, a global intelligence platform.

However, China had marginally higher investments at $375 million during the period, compared to the $350 million in India. China also saw deals drop to a new 5-quarter low of 15 deals, down 81{500813024f95d470e7cafb3286ca9b91f242a317be9a2aa6f1d2da9f36a6fda7} from Q2 of 2018.

Some large Indian fintech deals during the period include payments firm RazorPay, which raised $75 million in June led by Sequoia and Ribbit Capital, and digital insurance startup Acko, which raised $65 million from investors such as Flipkart co-founder Binny Bansal, SAIF Partners and others.

During the period, the US saw funding top a new quarterly high of $5.1 billion in Q2 of 2019. However, deals slipped to 143, the lowest point since Q4 of 2016. In Europe, the United Kingdom (UK) continued to lead as the top fintech market in Europe in 2019. Funding set a new quarterly record of $892 million, but deals dropped to 33 from 42 earlier.
The areas that fintech covers globally includes payments, insurance, lending, personal finance, wealth management, and blockchain/ cryptocurrency.

Over the next few quarters, fintech dealmaking is expected to continue at a strong pace in India, with at least 3-4 large deals underway, including at Cred, Lendingkart and Policybazaar.

What is Fintech?

Fintech, a combination of the words “financial” and “technology,” is a relatively new, and often nebulous term that applies to any emerging technology that helps consumers or financial institutions deliver financial services in newer, faster ways than was traditionally available.

Fintech is empowering consumers to take charge of their financial lives, leading to much greater financial literacy than ever before. It’s tearing down the old silos and helping to advance the consumers’ financial situation and outcomes by leveraging advanced technology. In short, the concept combines traditional financial services with the latest in digital technology and Big Data to make end users’ lives easier and better.

The growth of fintech is due in large part to the opportunity it affords small players to compete on the same field as traditional banks and financial institutions. Thanks to fintech, it’s no longer about who is biggest, but who is fastest and most responsive to effectively addressing the ever changing consumer demands. Additionally, the solutions offered by fintech companies are no longer “one size fits all.” Instead, they offer targeted – often niche – services that fill the gap of a particular financial need, sometimes at much lower costs than those offered by traditional financial providers.

As consumers become even savvier and more connected, the fintech companies that succeed will be the ones that continue to successfully innovate in bringing new solutions to old problems.

Recently, venture capital funding is start-ups globally has decreased by 2{500813024f95d470e7cafb3286ca9b91f242a317be9a2aa6f1d2da9f36a6fda7} compared to the previous quarter, with Asia slowing even as the US continues to see large-scale deal-making. The slowdown in Asia also seems to be driven by a slowdown in China, where funding has slowed down after a record-breaking decade of funds raised, investments and valuations.
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