India tops China in fintech funding in first quarter as pandemic, US trade war prolong ‘capital winter’
- In terms of deal volume, India recorded 37 investments versus China’s 26 deals in the March quarter
- Investments targeting China’s tech-based industries saw a 31.3 per cent decline in value in the first quarter
India has overtaken China as Asia’s top destination for venture capital investment in fintech although the lead may not last, according to analysts.
The change at the top comes amid a diminished investment appetite in fintech start-ups due to the economic crisis brought about by Covid-19, with China being particularly hard hit as it was the first market to be affected by the pandemic.
In the first quarter of 2020, fintech start-ups in India attracted venture capital investments worth more than US$330 million, compared with China’s US$270 million, according to London-based GlobalData.
In terms of deal volume, India recorded 37 investments versus China’s 26 deals in the March quarter, according to GlobalData.
“The global economic turmoil caused by the Covid-19 pandemic has diminished the investment appetite for fintech start-ups so far in 2020,” said Ayushi Tandon, fintech analyst at GlobalData. “In Asia, although there is an overall pullback in VC funding of fintech start-ups in [the first quarter], India grabbed the top spot as China was hit by the pandemic-induced economic recession.”
In fact, China had its worst quarter for fintech since 2015 as the country shut down large parts of its economy to fight the coronavirus outbreak, according to a separate CB Insights report issued earlier this month. Singapore, Japan and Indonesia also saw deal volume dip in the first quarter as the coronavirus spread to more regions, according to CB Insights.