Fintech M&A Activity in India Experiences Modest Dip in 2023

A recent report by Growthpal has shed light on the state of mergers and acquisitions (M&A) within the Fintech sector in India during 2023. The findings reveal a slight decline in M&A activity, with approximately 30 acquisitions compared to 37 in 2022 and 29 in 2021.

Among the notable M&A deals in lending, Bridge2Capital was acquired by IIFL Finance, FinFort by Yubi, and ORO Wealth by InCred Capital. The primary drivers behind these acquisitions were focused on product enhancement and expanding capabilities within the existing product offerings. Other motivations included client acquisition, geographical expansion, and entering new markets.

Lending Fintechs accounted for 30% of the total acquisitions in 2023, amidst increasing regulatory scrutiny in the sub-sector. Payments and Wealthtech also saw significant activity in M&A, continuing a trend from previous years.

The report suggests that the rise in lending sub-sector acquisitions may be attributed to heightened regulatory oversight in the lending space. Furthermore, the majority of acquisitions were led by larger players, with 20 out of 30 buyers classified as large acquirers.

In comparison to 2022, where 15 out of 26 buyers were large acquirers, the landscape has shifted slightly. The Enabler segment saw the highest proportion of deals at 35%, followed by Payments at 30%, and WealthTech at 21%.

Overall, while there has been a modest decline in M&A activity within the Indian Fintech sector in 2023, the market remains dynamic with key players seeking strategic acquisitions to bolster their offerings and expand their reach.