The IIFL Fintech Fund has closed its second vehicle at Rs 200 crore ($23 million), per an announcement. The firm has garnered commitments from India’s top family offices, UHNI, and HNI investors for the IIFL Fintech Fund – Series II as it looks to ramp up investments in the country’s next-generation fintech firms.
The IIFL Fintech Fund was set up in 2021, to invest in early-stage fintech firms that IIFL as a group could collaborate with as well.
Over the last three years, Fund I has made 14 investments across various segments in fintech. Going forward, it is looking to back companies in the generative artificial intelligence space as well.
IIFL Fintech Fund’s portfolio includes the likes of Leegality, FinBox, DataSutram, Finarkein Analytics, and Finvu, and TrustCheckr (sold to True Caller).
Its portfolio claims to have delivered a 22.5x revenue growth in the last three years, with 40% of the investee companies being EBIDTA positive. The fund boasts a 0% write-off/deadpool.
“We have seen very good response from HNIs, UHNIs, and family offices for our IIFL Fintech Fund Series – II,” Prakash Bulusu, joint CEO at IIFL Capital Services Limited, said in a statement. “Considering that India’s fintech is the only segment which is expected to grow 11x vs Indian online retail and Indian consumer tech, where the expected growth is 3x and 5.8x, respectively, the interest received for the fund was palpable,” he added.
Opportunities in the Indian fintech ecosystem are significant as financial services penetration in India remains low. The gap between major economies and India across segments — insurance, lending, neo-banking, and mutual fund assets — is anywhere in the range of 3-5x. This gives enough headroom for growth in the Indian fintech space.
Last year, financial services continued to be the most-funded industry with total funding proceeds worth $3.4 billion from 188 private equity and venture capital transactions, showed proprietary data (as of December 15, 2024) compiled by DealStreetAsia.
The investment marked a jump of nearly 21% in value from 2023 when financial services cumulatively garnered $2.8 billion from 128 deals.
