Startup Watchlist: 9 Fintech Startups To Watch Out For In 2018

This article is part of Inc42’s Startup Watchlist annual series where we list the top startups to watch for 2018 from industries like Blockchain, Logistics, Fintech etc. Explore all the stories from ‘Startup Watchlist’ series here.

“Digital technology provides a low-cost way for people in developing countries to send money to each other, buy and sell goods, borrow and save as long as the financial-regulation environment is supportive.” – Microsoft co-founder and former CEO Bill Gates.

In India, the need for technological disruption in the banking sector is all the more acute, given that over 19% of the country’s population still remains unbanked. This is where fintech startups come in.

Touted as the year of financial technology services, 2017 saw the emergence of a legion of promising fintech startups that are working to bring innovation and disruption to the otherwise conservative Indian banking sector.

Forecasted to cross $2.4 Bn by 2020, as per a report by KPMG India and NASSCOM, India is currently home to more than 500 fintech startups, whose collective aim is to attain financial inclusion. Since early 2015, the fintech sector has undergone massive changes, chief among them being the move towards a cashless economy.

The government’s enthusiastic promotion of cashless technologies – digital wallets, Internet banking, the mobile-driven point of sale (POS) and others – as well as the launch of IndiaStack including Aadhaar, eKYC, UPI and BHIM have also managed to restructure the financial sector, disrupting the long-held monopoly of traditional institutions like banks.

The Explosive Growth Of Indian Fintech Sector

Home to more than 462 Mn Internet users, the number of mobile users in India is expected to reach 1 Bn by the year 2020. In fact, it has the greatest market potential in the entire world, as determined by the Harvard Business Review (HBR) in its latest edition of Digital Evolution Index 2017.

Increased access to the Internet and social media, coupled with the explosion of smartphones, tablets and computers, have helped usher in swift, automated and efficient financial services solutions. Another factor that has played an integral part in the rise of the fintech industry was demonetisation (November 8, 2016).

Post the ban on INR 500 and INR 1,000 notes, India witnessed an acute dearth of cash, which in turn caused Internet-enabled cashless transactions to sky-rocket. As reported by Inc42, digital transactions increased 22% almost immediately after the ban came into effect.

In less than 24 hours after the embargo was announced by PM Narendra Modi-led government, Paytm saw an overwhelming 435% increase in overall traffic. Other digital wallets like PayU India witnessed a staggering 80% jump in transactions, while FreeCharge claimed that the average wallet balance on its platform increased 12 times. MobiKwik meanwhile reported an over 40% increase in app downloads within less than 18 hours of the announcement.

Digital wallets weren’t the only beneficiaries of demonetisation., Bengaluru-based mPoS solution provider Ezetap, which makes its own point-of-sale devices to enable merchants to receive digital payments, saw a 25% spike in transactions.

With the entry of big players like Amazon, Google, PayPal and Uber, India’s digital payments space has morphed into a $500 Bn behemoth in the making, according to a report by Google and Boston Consulting Group.

Simultaneously, a brigade of related startups has also emerged in different sub-sectors of fintech, such as in loan and insurance. For instance, there is BankBazaar as well as Gurugram-based insurance comparison platforms like Policybazaar, and financial services companies like IFMR Holdings.

Then there are companies like Mumbai-headquartered BillDesk, Instamojo and mobile-based Point of Sale (POS) providers Mswipe that have helped bridge the gap between the common man and the small retailers.

In segments such as alternative lending, including SME lending and P2P lending, startups also took the centre stage this year with players like ZestMoney, Capital Float, Lendingkart, CashCare, Indifi, Rubique, Faircent cashing in on the opportunity.

Fundings Aplenty In The Indian Fintech Sector

According to Inc42 DataLabs, the Indian fintech sector reported 102 funding deals this year till November, worth $2.59 Bn. As per data available, fintech startups grew by 31% Year-on-Year (YoY) to almost to 360 in 2017, with almost $200 Mn funding received in H1 of this year, recording a growth of 135% since H1-2016. In the sector, sub-segments like digital payments and lending are maturing, while wealth management and insur-tech emerging as growth areas.

Almost 33% of funding raised by fintech startups was in the areas of artificial intelligence and analytics.

This year, maximum investments took place in this segment at the late stage, with Paytm topping the charts with a staggering $1.4 Bn funding, followed by Flipkart-owned PhonePe, which reportedly secured $500 Mn from its parent entity. Then there was US-headquartered Ebix Inc that made headlines when it poured $123 Mn (INR 800 Cr) in Mumbai-based payments solution firm ItzCash, against an 80% stake in the company.

If we are talking about acquisitions, how can we forget Hyderabad-based Payswiff, earlier known as  Paynear which after expanding routes in Indian cities is now eyeing international markets? In October this year, Payswiff acquired Singapore-based GoSwiff in a deal reportedly valued at around $100 Mn. With this deal, this Indian startup now has an access to 20 new markets in South East Asian, Middle East, Commonwealth of Independent States and Eastern European markets. With all this, Payswiff is aiming to clock $16.8 Mn (INR 110 Cr) in revenues with marginal profits.

Well, it seems that fintech is going to be a sector to watch in 2018 too with so much going on around the clock.

Before we embark on an equally eventful journey in 2018, let’s take a look at the top nine fintech startups (which have raised less than $25 Mn in funding) that are a must watch in 2018.

Indian FinTech Startups To Watch Out In 2018


Gurugram-based Faircent is a peer-to-peer lending startup that connects lenders with borrowers. Launched in 2014, the startup offers a variety of tools such as Auto Invest, which is a fully-automated feature that matches a lender’s investment criteria with the borrower’s requirements and automatically sends proposals to the borrower on behalf of the lender, based on pre-selected lending criteria such as loan tenure, amount, and risk profile.

Recently, the startup, under the trusteeship of IDBI, created an Escrow account for its lenders to help in faster and smoother flow of funds enabling them to make greater returns on their investments.

As part of a move aimed at diversification, Faircent introduced a semi-secure loan product in collaboration with Bengaluru-based micro-lending startups. The initiative was aimed at helping students avail fast and easy personal loans at a reasonable cost.


Till date, lenders on the platform have committed to lend over $4.8 Mn (INR 31 Cr), while borrowers have sought up to $3.5 Mn (INR 23 Cr) in loans. At present, Faircent claims to receive over 225K loan requests per month, with most of them being used for funding businesses, family events, appliance purchases, debt consolidation, among others.

Earlier, Faircent was showcased as one of the top startups at Start Up India, selected for the first batch of NASSCOM 10,000 and was also part of the Microsoft Accelerator Winter Cohort and BizSpark programme.

The Indian P2P lending industry has undergone a massive boom this past year, thanks in part to the RBI’s decision to regulate the space. Expected to hit the $4 Bn-$5 Bn mark by 2023, the P2P lending space is inhabited by some 30 players, namely i-Lend, LendBox, LenDenClub, IndiaMoneyMart, Monexo, Rupaiya Exchange, LoanBaba, CapZest and i2iFunding.

Riding on the ongoing fintech revolution, Faircent is gearing up to reach a larger group of people and businesses seeking capital that they can borrow online, without having to rely on an official financial institution as an intermediary.

Unlike most other players in the sector, the Rajat Gandhi-led startup has attracted substantial investor attention. Armed with a war chest of more than $5.65 Mn, how Faircent fares in 2018 will be interesting to watch.


Conceived in 2015, Mumbai-based Kissht is a fintech startup that provides instant credit to consumers for making purchases at digital points of sale (both offline and online). Through its app, users can buy various items including mobiles, laptops, jewellery, and electronics by opting for flexible EMIs even without a credit card.

Once logged in to the app, users can see in-app merchant partners or choose to buy items from the Kissht store. A user can upload documents and make the down payment and pay the processing fees.

For customers with ongoing loans, Kissht provides an option to check the available line of credit. Also, users can make an early payment or view upcoming EMIs and invoices for the same. The fintech startup also provides cash loans that can be used for house renovation, holidays, purchase of consumer durables, education, short-term loan for equipment purchase, etc.


As claimed on the  Kissht’s official website, loan approvals on the platform take anywhere between 90 to 120 seconds. The company claims to have a fixed rate of interest which is charged on a monthly reducing basis. Users can avail flexible return tenures of up to 60 months and repay loans in installments. Last month, Kissht raised $10 Mn (INR 67 Cr) in a round led by Chinese investment conglomerate, Fosun International.

At the time, it was reported that the consumer lending startup was keen on expanding its presence across 15 to 20 tier II and tier III cities in India such as Amravati, Vijayawada and Satara, among others.

According to a report by brokerage firm Credit Suisse, the Indian consumer finance market is expected to touch $1.2 Tn by 2020, expanding at a compound growth rate of 18%.

With the advent of ecommerce, consumers are increasingly looking for easy credit to make online purchases. Kissht is feeding this demand through swift loan approvals and a growing presence in tier II and tier III cities across the country.


Launched in 2015, Simpl is an online payment instrument that allows customers to make purchases and settle payments online. It is a data-driven, mobile-first platform that works by reducing the payment flow to a single tap, therefore improving the client’s product experience, and giving users a payment model that’s faster and more convenient than wallets or cards.

Instead of having the make payments individually, customers can choose to pay just one bill, with all the online purchases added up. Among the merchants that currently work with Simpl include BookMyShow, FreshMenu, Faasos, Nykaa, Licious, Grofers, DocsApp, Drivezy, Dunzo and others. At present, the spending limit of customers on Simpl ranges between $11.7 (INR 750) and $78 (INR 5,000).

In August this year, the Mumbai-based payments startup reportedly raised an undisclosed amount in a Series A round led by US-based venture fund Green Visor Capital LP II. The round also saw the participation of other investors, including IA Venture Strategies Fund II LP, Boillot Family Trust, Russell M Byrne, The Oliver R. Grace Jr. Millennium Trust, SF Capital Investments LP and DIA Investments LLC.

As claimed by the company’s spokesperson, Simpl boasts a customer retention of around 85% overall, which is growing at 50% monthly. During a media interaction last year, co-founder and CEO Nityanand Sharma stated that the company had already achieved positive unit economics on every transaction.

To bolster its product portfolio, the company has also partnered with a number of banks and NBFCs.

In an already-saturated digital payments market, Simpl comes armed with biggies like BookMyShow, Grofers, Nykaa, FreshMenu and others as clients. The company’s chief selling point is its convenience.

By offering users the convenience of settling payments through a single bill, the tech-enabled startup is aiming to reach 100 Mn over the next few years.

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