M&A in Indian Fintech is Booming

Tech M&A activity in India is on a record path, with several tech sectors experiencing significant upticks in the number of deals. One of those sectors is financial technology, which had 16 acquisitions in the first half of 2025 compared to 11 in the first half of 2024 ‒ a 45% rise year-over-year. 

Well-capitalized Indian fintech companies actively pursued acquisitions to diversify offerings, deepen compliance capabilities, and expand their user base. In addition, Private Equity firms looked for opportunities to acquire fintech companies in India, both directly and through their portfolio companies.

There are a number of factors driving the rising M&A trajectory in the Indian fintech sector. Here are some of them.

Healthy Indian economy

According to the International Monetary Fund (IMF), the Indian economy is expected to grow 6.4% in both 2025 and 2026, driven by a combination of robust consumption, public investment, and government support and reform. This growth climb makes Indian tech companies, including Indian fintech companies, attractive targets for financial and strategic buyers both foreign and domestic. 

For example, Swiss PE firm Partners Group acquired a 75% stake in Infinity Fincorp, an Indian fintech company that provides specialized, customized loans to small businesses. The $230 million investment gives Partners Group entry into India's rapidly growing Micro, Small, and Medium Enterprise (MSME) lending market, capitalizing on the rising demand for credit in this segment.

The economic growth in India has also fostered a proliferation of Indian fintech startups, providing needed services. However, it has also intensified competition in the segment, making it difficult for some startups to scale and grow. M&A gives these startups a viable path to expansion as well as an exit path to liquidity for owners and investors.

Opportunity to address underserved markets

Despite the rosy economic picture, there are still large segments of India that remain underserved by traditional financial service providers such as banks. This large, untapped market creates opportunities for innovative fintechs to expand, and for larger firms to acquire these specialized startups to enter new segments.

A recent example is U.S.-based ecommerce giant Amazon’s purchase of Axio, an Indian non-bank lender that focuses on buy-now, pay-later (BNPL) and other credit products. The transaction, whose estimated value is approximately $200 million, gives Amazon access to Axio's direct lending capabilities and its non-banking financial company (NBFC) license. This will allow Amazon to expand its financial services offerings to customers and small businesses in India.

Consolidation

As the Indian fintech sector matures, the market is shifting its focus from rapid, cash-burning growth to long-term profitability. For smaller fintech companies with high customer acquisition costs, merging with larger players who can more easily cross-sell and monetize their existing customer base is a path toward survival.

Consider the recent $150 million acquisition of Indian wealth management firm Fisdom by Groww, one of India's largest brokerage platform providers. Groww will leverage Fisdom's wealth management platform and technology to expand its offerings into the wealth management sector. For Fisdom, the acquisition gives it access to Groww's extensive customer base and technological infrastructure, allowing for wider distribution of its wealth management services.

Also, Finwizz Financial Services, an Indian company offering loan products within the financial services sector, merged with Indian IT and services company Mywish Marketplaces (Wishfin) to create a new entity focused on financial product distribution. 

Slowdown in VC funding

A slowdown in late-stage venture capital funding is stimulating M&A activity in the Indian fintech sector as a primary strategy for growth, profitability, and exit for early investors.  Late-stage VC funding in the Indian fintech market dropped 41% in H1 2025 compared to H1 2024. This has forced  Indian fintech companies to find alternative paths, such as M&A, for capital and growth, and it has created an environment ripe for consolidation. Smaller fintechs that cannot raise further rounds of funding are forced  to seek buyers. This creates opportunities for well-capitalized fintechs, larger traditional banks, and  financial institutions to acquire attractive, and often undervalued, Indian fintech assets. 

For instance, in India, wealth-tech platform provider InCred Money acquired discount broking platform Stocko. The deal provides Stocko with significant capital, technology, and cross-selling opportunities from  a large, diversified financial services platform. And because it is now integrated into Incred, Stocko is no longer is dependent on VC funding. For Incred, the acquisition adds equities and derivatives trading to its existing products, which include fixed deposits and alternative investments.

Rapid digitization 

India is experiencing rapid digital transformation across various sectors, creating a strong demand for innovative tech solutions and fueling tech M&A deals. India’s fintech sector, for instance, is rapidly adopting digital solutions for faster, more convenient, and secure transactions. Companies are making deals to acquire technologies that are transforming banking, payments, and wealth management. 

One example is the acquisition of CreditNirvana by Perfios, India's largest B2B SaaS-based fintech company. CreditNirvana is an AI-driven debt management and collections platform provider based in India. Perfios purchased CreditNirvana primarily for its AI technology in debt management and collections, which strengthens Perfios's product suite and enhances its financial services offerings by providing an AI-driven platform to automate debt collection processes.

The acquisition of Fisdom by Groww and the purchase of Stocko by Incred Money were also driven largely by the need to gain the acquired company's technology.

Favorable government policies

Indian government policies such as streamlined Foreign Direct Investment (FDI) and regulatory frameworks have created a favorable environment for acquisitions in the fintech sector.

For instance, Groww's acquisition of Fisdom was accelerated by regulatory changes aimed at standardizing disclosures and promoting financial inclusion. And Amazon's purchase of Axio was aided by India's liberalized FDI policies, which allows up to 100% foreign ownership in most fintech-related financial services.

In addition, Reserve Bank of India (RBI) regulations, such as the Digital Lending Directions, 2025, have increased scrutiny on fintechs and encouraged them to acquire bank licenses for stability and regulatory compliance. This drove M&A deals in India such as fintech platform Slice's taking a majority stake in North East Small Finance Bank, to gain a banking license and become a full-fledged bank.

Summary

Various factors, such as India's robust economic growth, opportunity to address underserved markets, drive toward consolidation, slowdown in VC funding, demand for leading-edge technologies, continued digital transformation and innovation, and government incentives, are driving growth in M&A activity in the Indian fintech sector, a trend that that is expected to continue into the future.