Long before fintech became a buzzword on the startup landscape, Ramesh Mengawade built five payment technology companies in Pune. He sold ElectraCard, a card processing company, to Mastercard and Opus Software, a digital payments processing company, to Western Union. Mastercard and Western Union used these acquisitions to enter India and have since expanded their presence in the country. Serial entrepreneur Ram Iyer, founder and CEO of Pune-based Vayana Network, has facilitated $8 billion in supply chain financing on the Vayana platform. He had earlier co-founded payment technology company Cashtech Solutions, which was sold to Nasdaq-listed Fundtech. And recently, digital payment startup IZealiant Technologies was acquired by fintech unicorn Razorpay. IZealiant is into payment banking solutions with deployments at dozens of banks.
There are other enterpreneurs who have been building their fintech business from the city. Lending app EarlySalary, founded by Akshay Mehrotra and Ashish Goyal, that offers cash loans, personal loans, BNPL and credit linked cards to young middle-income Indians, has become one of the largest consumer lending fintech companies, having disbursed Rs 5,400 crore of digital credit through 2.4 mn loans in six years. Srinivas Kantheti, former president, Bajaj Auto, co-founded WheelsEMI, which is now the largest used two-wheeler finance company in the country. It has disbursed Rs 1,234 cr to 2,50,391 customers across 130 locations. It has now added loan against vehicle and electric vehicle financing to its portfolio.
The number of successful fintech firms emerging from Pune has led to more entrepreneurs making it their base, turning the city into one of the fastest growing fintech hubs in India. Abhishant Pant, founder of The Fintech Meetup, a fintech accelerator, says in the next couple of months there will be a fintech unicorn from Pune, putting the city firmly on the fintech map.
In 2019, The Fintech Meetup joined hands with a Pune-based incubator for tech startups, Idea’s to Impact, to bring all the players in the fintech ecosystem together. There were 29 fintech startups in Pune at that time. They met again in Mar’22 and they discovered that the number had tripled to 90, with many more working in stealth mode.
Pune’s proximity to Mumbai, the financial capital, has made it particularly attractive in this context, says Pant. “Pune is a welcoming city with a Bengaluru kind of ecosystem but without the issues Bengaluru faces, like traffic. It offers better infrastructure in terms of lower cost of establishing a business, and human resource and tech talent with an understanding of financial services,” he adds.
Gireendra Kasmalkar, founder of Idea’s to Impact, says the city would soon build up critical mass in the field. “We are getting there fast with lots of pieces coming together,” he says. Talent and access to capital, customers, and financial institutions were driving growth in the number of B2B fintech firms. In fact, Idea’s to Impact is launching an incubation programme for early-stage fintech startups in Pune. According to Kasmalkar, fintech startups were often asked to move to Bengaluru or Delhi by investors for better access to capital. The goal is to attract more angel investors to Pune and ensure this doesn’t happen, he says.
Maneesh Bhandari, founder and CEO, GrowthPal, and a leading angel investor, says the city has the key ingredients of a financial services hub because of the presence of around 100-plus back offices of banks and financial institutions. This has helped create an ecosystem where fintech products and services organisations can thrive. According to him, Pune and Chennai have the largest strength of fintech domain talent in the country. “Pune has ample tech talent too with a startup mindset. And that makes the city a natural hub for fintech startups,” says Bhandari.
The Fintech Meetup and Idea’s to Impact team is confident of growing the fintech ecosystem further and increasing the base to 200 fintech startups. The Pune-headquartered Cosmos Co-operative Bank recently hosted the Pune Fintech Meetup, with founders of Pune-based successful fintech startups in attendance. These included Vayana Network, EarlySalary, LoanTap, Sarvatra Technologies, Phi Commerce, One Card, Electronica Finance, PayGlocal, DocBoyz and Wrapped Asset Project.