Tracking market trends from a distance is one thing—being on the ground, meeting with founders and investors, is another. Recently, VEF Principal and India expert Shashi Mahajan visited India, one of the world’s most dynamic fintech markets, to get firsthand insights on the latest developments. In this travel piece, Shashi shares his key takeaways on the latest fintech trends shaping India today.
What’s the buzz on the ground within India’s fintech ecosystem?
Regulation clearly dominates the conversation on the ground. Compliance is no longer a hurdle—it’s now a competitive advantage, effectively a regulatory moat for those that embrace it. The Reserve Bank of India is actively shaping the fintech industry, and companies that work with regulators are the ones gaining ground. Business models that were once fuelled by aggressive expansion are now being rewired for growth with compliance at the core, as clear rules of engagement emerge across the sector.
With India’s public and private markets undergoing major shifts, what key trends are defining its fintech sector?
India’s fintech market is maturing, and local investor sentiment reflects this shift. Capital is still flowing, but with much greater discipline and selectivity. We’re seeing a growing presence of deep-pocketed investors—private equity firms, family offices, and other institutions. Family offices, in particular, are far more active now, with many managing more than USD 100 mln of investable capital. They are increasingly looking for secondary transactions (buying stakes from existing shareholders), often willing to pay a premium for shares in high-quality private fintech companies.
Unified Payments Interface (UPI) has transformed how Indians pay, moving the country toward a cashless economy. What’s next?
During my visit, I saw real-time digital payments as part of everyday life in India. UPI has truly revolutionized the way Indians transact. Now, fintech innovation is moving beyond payments and building a broader financial ecosystem that extends into credit, financial data, and commerce. India’s public digital infrastructure is unlocking new opportunities, with initiatives like the Unified Lending Interface (ULI) making it easier for small businesses to get loans, and the Account Aggregator framework simplifying how financial data is shared. Meanwhile, the Open Network for Digital Commerce (ONDC) is reshaping e-commerce by allowing more businesses to embed financial services into digital marketplaces – a prime example of embedded finance in action.
What direction are you seeing fintech in India going?
One of the biggest takeaways from this trip is that the next big opportunity for Indian fintech isn’t just about innovation, it’s also about financial inclusion. Much of the industry has historically focused on the top 1-2% of the population, but now the focus is shifting toward the hundreds of millions who remain underserved. With 700–800 million smartphone users across the country, fintech companies are scaling solutions tailored to rural and underbanked communities. Thanks to public digital infrastructure and regulatory support, financial services are reaching beyond urban centers—unlocking one of the largest untapped markets in global fintech.