India became world's third largest financial technology (fintech) centre -- behind only the US and the UK -- in 2019 as fintech investments nearly doubled to $3.7 billion from $1.9 billion in 2018, an Accenture study said on Thursday.
The number of deals was up slightly to 198 last year from 193 in 2018, said Accenture analysis of data from CB Insights, a global venture-finance data and analytics firm.
The vast majority of funds raised last year in India went into payments startups (58 per cent), while insurtechs raked in 13.7 per cent of the investments and fintechs in lending accounted for 10.8 per cent of the total, the data showed.
One97 Communications, the parent company of digital wallet Paytm, raised $1.66 billion from two separate transactions, while PhonePe tapped investors for about $210 million -- also from two separate deals -- and full-stack financial services company Razorpay raised $75 million.
Other large transactions included $282 million insurtech PolicyBazaar raised from two deals and the $120 million from credit card payments company CRED, the findings showed.
Investments in payments companies more than tripled to $2.1 billion from about $660 million in 2018, while funding into insurtechs also rose strongly, up 74 per cent to $510 million.
"There's a lot brewing in India's fintech ecosystem and this steady flow of funds shows investors' confidence in the industry's future growth potential," said Sonali Kulkarni, Managing Director - Financial Services, Accenture in India.
"The increase both in deal value and the number of deals is a good indicator of what's to come and bodes well for the future development of cutting-edge financial technology in the country," she added.
Investment in fintech ventures rose sharply in most major markets in 2019, led by gains in the US and the UK and emerging economies such as India and Brazil.
Despite those gains, the total value of fintech deals globally dipped 3.7 per cent, to $53.3 billion from $55.3 billion in 2018, boosted by a record $14 billion from Ant Financial and three other multi-billion-dollar transactions from Chinese companies.
Fintech deals in China dropped 92 per cent in 2019, to $1.9 billion, with the $145 million financing from insurtech Shuidi Huzhu in June being the country's largest transaction.
"Despite strong demand for fintech globally, it's likely that as startups become more mature, investments will flow to fast-growing economies, where there's still a huge, unaddressed consumer and corporate market thirsty for innovations," said Julian Skan, a senior managing director in Accenture's Financial Services practice.