Over the past year, much has been said about China’s ever-increasing interest into fintech, including its push for blockchain technologies by both the government and the private sector. However, data from the GlobalData analytical company showed that India’s venture capital investments into fintech have surpassed those from China in Q1 2020.
Analysts say the two markets aren’t competing
In the first quarter, India’s fintech startups attracted a total of $330 million in venture capital. That’s a fairly sizeable gap when compared to the $270 million that investors poured into China’s fintech over the same period. Ayushi Tandon, an analyst with the company, said that the current global landscape had much to do with the disparity in investment. As Tandon explained, China has been among the hardest, if not the hardest hit country by the global pandemic, which reduced investors’ appetite to place a stake in Chinese businesses.
Another cause for the intensification of India’s fintech investment is likely the nation’s rapidly-growing acceptance of different technologies, especially in the wake of the crisis which made digital transactions more appealing. Despite the massive population of both countries, fintech is an under-represented sector in India compared to China, yet this is a trend that is beginning to change. Nonetheless, Prasanto K Roy, a tech policy consultant at the company, said that the two countries won’t be competing for venture capital, as both countries hold different appeal for investors, with China’s fintech sector being more developed and India’s having higher growth potential.