Posted on 05 August, 2020
“Payment fintech is a crowded segment; the industry
operates on thin margins and is always under pressure,” said Pankaj Raina,
Managing Director, Research and Investments, Zephyr Peacock India, adding, “The
NBFC sector is witnessing several liquidity constraints, overall credit
disbursements, some of which that are facilitated by fintech companies have
also been impacted.”
“Fintech includes several segments, such as insurance,
loans, alternate credit scoring algorithms, lending, etc. There are many
players in each of these segments vying for market share. The success factors
for these solutions, in addition to value of transactions, include the number
of users, revenue per user and margin per user. The margins are lower in these
segments as there are many incumbent players in each of these segments,” Raina said.
Click here to read the full article on ‘Business Line’
Below is an excerpt from the post which first appeared on
Business Line on 5 August 2020:
Investments into the fintech sector soared last year and
with this increased acceptance and preference for contactless payment methods
over the past three months, one would assume that fintech funding would also
touch new heights.
Dip in funding
But, contrary to expectations, the funding that went into
the fintech start-up space in Q2 2020 was the lowest in the past nine quarters
— only $184 million was invested in the April-June quarter this year, according
to data from Venture Intelligence, a firm that tracks private companies’
investments, financials and valuations.
“Payment fintech is a crowded segment; the industry operates
on thin margins and is always under pressure,” said Pankaj Raina, Managing
Director, Research and Investments, Zephyr Peacock India, adding, “The NBFC
sector is witnessing several liquidity constraints, overall credit
disbursements, some of which that are facilitated by fintech companies have
also been impacted.”
“Fintech includes several segments, such as insurance,
loans, alternate credit scoring algorithms, lending, etc. There are many
players in each of these segments vying for market share. The success factors for
these solutions, in addition to value of transactions, include the number of
users, revenue per user and margin per user. The margins are lower in these
segments as there are many incumbent players in each of these segments,” Raina
said.
Investment figures for fintech start-ups in July also do not paint a pretty picture. They garnered only $18.04 million and the sector was among the least funded, last month, while segments such as ed-tech ($164.95 million), media and entertainment ($53.90 million) grabbed more funding comparatively, according to data from Tracxn, a firm that tracks investments and financials of private companies and start-ups.
Click here to read the full article on ‘Business Line’
Zephyr Management is a global emerging markets investment manager, specializing in the creation and management of highly focused private equity funds
Since its inception in 1994, Zephyr has sponsored and/or managed 26 investment funds in both public and private securities markets representing approximately $1.2 billion in combined commitments and assets under management
Emerging Markets Focus
The firm has initiated several private equity funds investing in several African countries, South Korea, Mexico, India, and Sri Lanka since its founding. Zephyr's funds serve medium size enterprises that are often ignored by larger private equity players. Zephyr funds provide growth capital to established companies with proven business models and sustainable competitive advantages.
Investment activities are currently focused on India, Sri Lanka and Africa.
Zephyr Peacock India
Zephyr Peacock India provides equity financing for fast growing, small to medium sized companies led by strong entrepreneurs and management teams.
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Emerald Fund provides equity financing for fast growing, small to medium sized (SME) Sri Lankan companies led by strong entrepreneurs & management teams.
Read MoreZephyr Acorn provides equity
Zephyr Acorn provides equity financing and business support to innovative early-stage companies in East Africa.
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The firm's special expertise lies in bringing global best practices to medium-sized growing companies by assisting them in conceptualizing sustainable business strategy, management development, compensation, ESG, expansion outside of their home country, capital structure and positioning for stock exchange listing or trade sale.