The year 2023 witnessed a surge in the number of fintech startups which got incorporated in India as the number was 72.6 per cent less than in 2021 and 55.55 per cent lower than in 2022, a recent data showed on Tuesday.

According to mergers & acquisitions (M&A) deal-sourcing platform Growthpal, in 2023, as many as 20 fintech startups were incorporated in India, compared to 73 and 45 in 2021 and 2022, respectively.

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This does not reflect the data for startups with less than 10 employees or do not have a website or LinkedIn page.

It also highlighted that there had been around 30 acquisition deals in the Indian fintech space in 2023 as compared to 37 and 29 deals in 2022 and 2021 respectively. Some of the notable deals in lending were Bridge2Capital’s acquisition by IIFL Finance, FinFort’s acquisition by Yubi, and ORO Wealth’s acquisition by InCred Capital, among others.

Out of these, the majority (20) were done by large companies with over 1,000 employees or funding of over USD 50 million.

Six of these were made by companies with more than 500 workers and over USD 20 million in funding while five of them were done by smaller companies.

Speaking on the development, Maneesh Bhandari, founder and chief executive officer at Growthpal said, “During 2020 and 2021, both regulators and founders gained insights into the capabilities and limitations of emerging fintech products.”

“However, the subsequent introduction of new regulations and compliance measures across industries has created a challenging environment for launching new fintech ventures.”

Reportedly, the established Fintechs have already implemented cost control measures and have either achieved profitability or they’re well on their way to it.

Their strategy for 2024 is likely to be led by shifting their focus back to growth, from just being on cost control and profitability. Growth strategies could be focused on new client acquisitions in core areas, diversification into new product categories, and identifying and executing ways to monetise their existing client bases further.