VC firm Elevation Capital bets big on India's fintech, eyeing a $400 billion opportunity by 2030
Early-stage venture capital firm Elevation Capital has already invested a staggering $2 billion in the country across various startups. Remarkably, a significant $500 million of this investment is exclusively dedicated to fintech companies. Elevation Capital's portfolio boasts names like Paytm, as well as traditional financial institutions like Karur Vysya and Edelweiss. With their sights set firmly on the future, the firm believes that the fintech sector in India holds the promise of a $400 billion opportunity by 2030.
Mridul Arora of Elevation Capital recently shared the firm's optimistic outlook. Arora stated, "We feel, having now invested in India for over 20 years, quite bullish about financial services and the fintech space. We think today, we are at a very interesting inflection point where a number of forces are coming together."
Arora went on to emphasise the importance of the financial services and fintech sectors in their investment strategy. He remarked, "We think financial services and fintech are very, very core to our fund's strategy and areas of focus for us. So that share will remain very high. We think lately India, building products for the globe in terms of SaaS, and enterprise SaaS, within that FinTech SaaS, we believe will also be another core area of focus."
Speaking from the side-lines of Global Fintech Fest, Arora provided more insights into Elevation Capital's investment strategy. He stated, "Fintech and financial services will anywhere range between 25 to 35 percent of the total pool, and then depending on fund-to-fund cycle-to-cycle, the percentages can vary."
One of Elevation Capital's flagship investments in the fintech realm is Paytm. Speaking about the growth of Paytm, Arora said, "If you really look at the business fundamentals of Paytm, the journey so far has been to create a very, very strong consumer and merchant franchise, where you have hundreds of millions of customers transacting, tens of millions of merchants transacting and then create almost. In his discussion about Paytm's growth trajectory, Arora emphasised the company's remarkable journey in building a robust consumer and merchant network. With hundreds of millions of customers and tens of millions of active merchants engaging in transactions, Paytm has effectively created a self-contained ecosystem, enticing users to return repeatedly.
Arora highlighted, “Now payments is only a wedge product. But if you now look at the metrics they have on lending, and the roadmap they have on other financial products, we actually believe the true operating leverage of the business is playing out now. It's very visible last few quarters in the numbers that you see. And we think that financial performance should only continue to improve over time.”
