India’s new breed of investment tech startups gains steam, but challenges persist

Aviral Srivastava, a 25-year-old medical professional in Lucknow, is taking an unconventional financial approach to purchase a pair of branded shoes.

Instead of the traditional buy now, pay later option, he is embracing a “save now, buy later” plan to acquire the 18,000 rupee (US$216) footwear. The idea was thanks to Multipl, a lifestyle investment management app founded in 2020.

Multipl app / Photo credit: Multipl

“Since January, I invested 6,500 rupees (US$78) through Multipl, and it is now valued at 7,200 (US$87) rupees,” Srivastava says.

Not only did his investment yield an 11% return in just eight months, Srivastava can also get discounts or vouchers from popular brands once he finally buys the pair of shoes he’s been eyeing.

Meanwhile, GB Deenesh, a finance professional from Pondicherry, opted for a more aggressive investment strategy.

Instead of settling for a regular fixed deposit with a 6% to 7% interest, he ventured into the bond market through Indian investment app Wint Wealth. The gambit earned him nearly 10% in annual returns for his initial investment of 10,000 rupees (US$120).

Srivastava and Deenesh’s stories illustrate how financial savings in India have shifted in recent years, with more households diversifying their portfolios away from traditional instruments like bank deposits. Gold, mutual funds, and equities have emerged as important tools for growing financial savings.

For their part, startups are using the latest tech to help consumers do this. Startups in this segment allow users to invest in digital gold, fractional real estate, equity, goal-based mutual funds, digital chit funds, and more.

The country has also seen the rise of micro-investing platforms as well as save now, pay later firms.

This movement has been a game changer for the many Indians who were previously excluded from the formal financial system.

Unlike Zerodha and Groww – both profitable fintech companies that focus on high-intent users in Tier 1 cities – the new breed of “invest tech” platforms is dedicated to reaching users in Tier 2 areas and beyond.

Their goal is to make investing accessible to every Indian, regardless of location or income level.

While private equity and venture capital deals in fintech have traditionally focused on startups in payments and lending, investment and savings technology is turning out to be a promising sector.

Challenges in Tier 2 India

Tapping into the aspirational parts of India

Market viability and challenges