‘Save now, pay later’ gains traction in India’s Tier 2 cities

IN FOCUS

In today’s newsletter, we look at:

• Young adults driving the rise of wealthtech startups in India’s Tier 2 cities
• Why the closure of GrabInvest signals more challenges ahead for digital investment platforms
• Indonesian payments firm LinkAja hitting its EBITDA-positive milestone

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Hi there,

Buy now, pay later is no longer in vogue – but perhaps “save now, pay later” is.

Professionals in India’s Tier 2 cities are taking unconventional approaches to obtain their latest kicks – setting aside small sums of money in investment accounts, earning interest over months, then making a purchase with the help of discounts or vouchers from brands.

Many digital investing platforms have turned profitable by focusing on serving customers in the country’s Tier 1 cities. But a growing movement, led by companies like Multipl and Wint Wealth, are targeting users in Tier 2 areas and beyond.

These firms face challenges such as competition from incumbents, declining household savings, and a lack of financial literacy. Prabhu Mallikarjunan gives the lowdown in this week’s Big Story.

I have a lot of respect for the firms hunkering down on widening financial inclusion. But, as Grab’s closure of investment services AutoInvest and Earn+ last month signals, doing so in a commercially viable way isn’t always easy.

I dive into that and more in this week’s Hot Take.

— Melissa

THE BIG STORY

India’s tier-2 investment tech startups gain steam, but challenges persist

Image credit: Timmy Loen

Since 2020, nearly 126 investment tech startups have emerged in India, with a quarter focusing on gold investments.

THE HOT TAKE

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FYI