“If you are an angel, and you are part of a FinTech company that was capital-efficient and did not have to raise $2 Mn later, you will not get diluted in a significant way that happens with a consumer player – early investors essentially get wiped out. This is because of the overlays of the later investors and the liquidation preferences that keep coming. Best investments are the tech providers,” says Sharad Sharma, Co-founder of iSPIRT Foundation.
Sharad mentions that the success of the FinTech ecosystem is the result of many types of companies catering to each other’s needs, and there are many opportunities for angels who are interested in FinTechs.
He goes on to say, “if you invest in PhonePe, it has to have consumer success, and it has 30% of the UPI market share today. But, JusPay has about 40% of the market share because they are the arms merchant to everybody who is providing UPI. So, they are B2B FinTech players. These are very capital-efficient players and capital efficiency matters to an angel investor. “
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