There is a $25bn opportunity hiding in plain sight — You’ve come across this on multiple occasions (your last flight booking on MMT, your last mobile purchase from Amazon, your last bike or car purchase)

There is a $25bn opportunity hiding in plain sight — You’ve come across this on multiple occasions (your last flight booking on MMT, your last mobile purchase from Amazon, your last bike or car purchase)

Some financial products ONLY make sense at the point of commerce. This is known as Embedded Finance i.e. a contextually relevant financial product (e.g. insurance, loan) which is offered at the point of purchase / commerce user journey.

A few months back, Elevation Capital released a report on India’s Embedded FinTech opportunity — in the most recent Breakdown video, I’ve covered the key takeaways from this report plus a few more insights ⤵️

(1) ⏪The history of embedded Finance in India —

Amazon was an early mover (Amazon Pay, Axio in lending, Acko in insurance & Smallcase in Wealth).
Followed by the emergence of large BFSI subsidiaries from scaled up startups (e.g. Ruppy from CarDekho Group, Oxyzo Financial from OfBusiness etc).
Today these subsidiaries are at-scale (Oxyzo did ~₹60 crore PAT in Q3FY25) which is a repeat of the old world conglomerate success (e.g. Bajaj Finance, Hero FinCorp etc)

(2) ⏰The ‘present’ of Embedded Finance —

Account Aggregator & other DPI provide tailwinds to build fully digital journeys
Digital open ecosystems (e.g. ONDC launching loans & insurance) has added a new dynamic
Regulators are taking matters into their own hands (e.g. Unified Lending Interface by RBI)

(3) 🌟The future / opportunities —

FinTech infra (i.e. enablement layer) is on FIRE — IPOs / acquisitions are common here — Perfios turned profitable | M2P Fintech continues its roll-up strategy

Embedded financial services for SMBs (esp. in vertical B2B marketplaces) is still an exciting opportunities (I’ve explained the Anchor led play in this video)

🙏Thanks to Varun Mayya, Achina & the Aeos Labs Media team for editing this video! And big shout-out to Zerodha — Breakdown is part of Zerodha’s Zero1 media network which covers the cost of producing these videos.

➡️ Embedded Finance might be a niche topic — BUT, is remains one of the most potent monetization tools for any consumer platforms (as they say — “every successful company in India, at some point, becomes a loan, mutual fund & insurance distributor!”)

startups india fintech

This post was originally shared by on Linkedin.