Investors Flock to Indian Fintechs Amid Wealth Boom

Private equity is betting that Indian investors will want financial apps they can quickly access from their pockets, in lieu of chatting across mahogany desks.

The nation’s wealthtech startups are not only benefiting from a growing middle class, but also looking to court some of the country’s wealthiest citizens, and financial backers like their odds. PE firms are pouring tens of millions of dollars into India’s wealthtech sector as the country’s GDP and overall affluence rise.

Lightspeed Venture Partners — a US-based firm with $25 billion in AUM — is on the verge of leading a funding round of more than $20 million in Centricity, a wealth management platform, sources recently told TechCrunch. And back in 2022, New York’s Tiger Global backed a  $22.6 million investment into Jar, an Indian startup that allows users to buy and sell gold assets.

Bangalore’s Premji Invest is reportedly expected to lead a funding round of between $30 million and $40 million in Dezerv, an app for high-income investors. Peak XV Partners, also based in Bangalore, will pump $35 million into wealth and asset management app Neo. 

Country on the Grow

India is expected to be the fastest-growing major economy this year, with the International Monetary Fund forecasting a GDP growth rate of 6.8%. The country is quickly becoming an alternative to China for companies looking to diversify their supply chains and derisk from the Middle Kingdom. 

At the same time, individual wealth is growing, too:

• Between 2019 and 2023, the compound annual growth rate of “affluent” Indians — those earning more than $10,000 a year — grew an estimated 12 times faster than the CAGR of India’s population, according to a Goldman Sachs report. The Wall Street giant projects that cohort to grow to 100 million by 2027. 
• As for the richest of the rich, the Knight Frank Wealth Report projects the number of UHNW individuals — those with net worths of more than $30 million — to grow to just under 20,000 by 2028, a 50% jump from 2023.

Kickin’ It Old Skool: Right now, India’s ratio of mutual fund AUM-to-GDP is at 15% versus a global average of 75%, TechCrunch reported. So with Indians’ newfound wealth and plenty of room for the country’s asset management sector to grow, PE sees limitless potential in wealthtech.

However, many investors, especially the ultra-wealthy, are still going to prefer the personal touch of an in-the-flesh broker. That’s why BlackRock is growing its footprint in the country in partnership with India’s Jio Financial Services: The companies are pouring $150 million each into the new venture. Sometimes you just can’t beat a handshake.