FINTECH IN INDIA

1. FinTech started its trial by setting its operating base in the banking industry. But over the last
five years, it has seen tremendous development and has expanded to insurance and asset
management companies as well. By leveraging machine learning, FinTech companies are looking
to analyze customer expectations and their responses. This will create the ability to forecast
demand and provide customized supply services through technology
2. Another way the banking sector is promoting the FinTech industry is by adopting its innovations.
One major example of this is blockchain. Blockchain technology will eventually replace the
traditional methodologies of making payments, lending funds, and updating KYC
documentation.
3. Currently, across segments, there are over 600 FinTech Startups in India that could potentially
improve quality and make financial services more cost-effective.
4. it is not an easy task to keep up with the rapid technological updates taking place in a financial
industry. However, the Indian Government has not only kept pace but has also created an
initiative called ‘Startup India‘ and has provided a dedicated fund of USD 1.5 billion to support
upcoming and innovative Indian startups.

5. Another example is UPI, Unified Payment Interface, which is a system set up by the
Government of India. UPI channels multiple banks accounts into a single mobile
interface in an attempt to unify the citizens towards the ‘cashless India’ motive. Further,
the National Payments Corporation of India is soon going to launch UPI 2.0. This revised
app has additional features such as increased transfer limits and promotion of merchant
transactions.
6. RBI came up with a peer-to-peer (P2P) lending scheme in 2016 that uses crowdfunding as a base
to raise funds between borrowers and lenders within India. At present, there are 30 peer-to-
peer lending companies in our country that bring individuals together on a common platform.
7. The growth of FinTech has changed every aspect of loan processing. While lending used to be
exclusively limited to banks and credit unions, now even FinTech companies are extending loans
to consumers. The ability to provide personal loans, mortgages, business lines of credit, etc. has
taken FinTech to the next level.

8. With digitization, confidentiality of data is exposed to increased levels of risk. Protection

has to be the topmost priority to make sure that customer information is not vulnerable
to cybercrime.
9. Customer trust is another obstacle that FinTech companies will need to overcome. The
main challenge is to build the assurance required for consumers to look beyond their
conservative mindsets. This will encourage them to change the way they have always
been availing financial services.
10. FinTech has tremendous growth potential in India, due to the country’s inclusive
economy, broad consumer expectations, and developmental scope. One thing is certain,
and that is that digitization will make FinTech the future of monetary transactions across
the globe.
services offered by online finance businesses:

 Payment services: e-wallets and mobile payments. Ex: PayTM

 Peer to Peer (P2P) Lending services. Ex: CapitalFloat
 Customer to Business (C2B) and Business to Customer (B2C) retail banking services. Ex:
Mswipe
 Personal Finance and Investment advisory services. Ex: BankBazaar
 For Payment service: The Reserve Bank of India launched a ‘Differentiated banking
license’ scheme for issuing ‘on-tap’ licenses to businesses that want to start financial or
banking services. For this, they can apply with the RBI to register themselves.
 For P2P: They can only act as intermediaries.
 For Retail service providers: Licensing to retail fintech to carry out lending and
depositing services for micro, small and medium industries and unorganised sectors.
 For Financial Management/Investment: There are no regulations for finance
management businesses, but the RBI has proposed that these FinTech would be
registered as NBFCs- Non-Banking Finance Companies.

Strengths of Israeli Fintech Startup Environment

Israeli culture and mentality is the most dominant factor in the proliferation of Fintech startups.
Israeli mentality is characterized by entrepreneurial spirit and innovative thinking. Moreover,
Israeli culture is geared towards ambition and agility due to the underlying immigrant society.
To promote technological innovation and exchange novel insights, the Israeli community is
enthusiastic towards various networking opportunities, including hubs, conferences, and
symposiums. More specifically, the Israeli Bitcoin emBassy gathers entrepreneurs to promote
the widespread usage of bitcoin, and Barclay’s Rise Tel Aviv and Fintech Aviv are cooperating to
find innovative solutions regarding the digitization of banking. Finally, China’s Pando Group is
supporting The Floor to connect the Israeli Fintech market with Asian investors.

The local Israeli financial market is limited in size and centralized in portion, with five banking
groups controlling over 90% of the whole Israeli banking credit. Hence, a considerable portion
of the funding for Fintech startup comes from venture capitals and multinational banks. Also,
most Israeli Fintech startups do not consider doing local business due to the limited size of the
Israeli finance sector, local regulations and compliance, and the market dominance of a small
number of banks as mentioned above.

Top 5 Israeli Fintech Startups

1. Payoneer

Payoneer is a financial services firm founded in 2005 by Israeli investor Yuval Tal. Payoneer
provides online international money transfer and digital payment services, which allows
account holders to send funds to and receive funds from their bank accounts, Payoneer e-
wallets, and prepaid MasterCard debit cards. Payoneer specializes in international B2B
payments, providing cross-border transaction services through more than 150 local currencies.
Its main clients include Airbnb, Amazon, Google, Fiverr, Getty Images, and Upwork, who use
Payonner to send massive amounts of payouts globally. Other various eCommerce
marketplaces use Payoneer too.

Yuval Tal founded Payoneer in 2005 with $2 million through seed funding, and 83North added
$4 million funding in 2007. Other investors include Carmel Ventures, Wellington Management,
and Susquehana Growth Equity. 2016 is marked as an important year in the firm’s history. In
2016, Payoneer acquired Armor Payments, which was an internet escrow company. Through
this acquisition, Payoneer was able to facilitate B2B transactions between $500 and $1,000,000,
the range for which credit cards and letters of credit were not appropriate. In 2016, Payoneer
also partnered with Latin American eCommerce site Linio, Japanese eCommerce giant Rakuten,
Korean B2B marketplace EC21, and Indian bank IndusInd Bank. Payoneer currently has more
than 1,000 employees globally across 14 offices. The firm’s services are provided in over 200
countries and has more than 4 million users world-wide

2. OurCrowd

Jonathan Medved found OurCrowd in 2013, and GE Ventures partnered with OurCrowd later
that year, allowing GE to invest in OurCrowd’s investments too. By the end of 2013, OurCrowd
managed to raise $25 million for 30 portfolio companies. This figure rose to $100 million for
100 portfolio companies by 2016. 2016 marked itself as a year of expansion for OurCrowd as it
launched various funds, including Our Innovation Fund that invests in Australian startups, Qure
that invests in digital health startups, and OurCrowd Portfolio Index Fund. Moreover, OurCrowd
managed to raise $10 from United Overseas Bank of Singapore, displaying its ambition to
expand into the Asian market. The number of investors increased year after year, from 3,000
investors attending OurCrowd’s summit at Jerusalem in 2016, to 5,000 investors in its 2017
summit. In 2018, OurCrowd managed to have 10,000 investors attend its Jerusalem summit.
Recently, OurCrowd decided to direct its Lab2/02 seed stage incubator into investing in 100
startups for a period of 10 years. Furthermore, OurCrowd started a partnership with Bangkok
Bank Public Company Limited to reach out into the Thailand market.

OurCrowd currently has more than 25,000 investors globally from over 112 countries.
OurCrowd has raised investments for startups in the US, India, Canada, UK, Hong Kong,
Singapore, and Australia, and has offices in Tel Aviv, San Diego, New York City, Toronto, London,
Sydney, Madrid, Hong Kong, and Singapore. To date, OurCrowd has raised $700 million for 160
portfolio companies.

3. Fundbox

Fundbox is a financial technology firm founded in 2013 by Yuval Ariav, Eyal Shinar, and Tomer Michaeli.
Fundbox provides a cash flow optimization tool that balances advances and outstanding invoices to
enhance cash flow. Primary clients include small businesses and freelancers seeking to consistently
maintain operations and to have a steady flow of cash for expenses such as equipment investments or
payroll payout. Fundbox’s tools allow clients to smoothly run their businesses through optimizing cash
flow and to discretely use advances from account receivables invoices. Fundbox uses data science
engines and machine learning algorithms to calculate the line of credit and the risk of each invoice and
deposits funds accordingly into the clients account.

Yuval Ariav, Eyal Shinar, and Tomer Michaeli found Fundbox in 2013, but it was under stealth
operations until 2014, when it managed to raise $17.5 million through its series A investment
round. Khosla Ventures, SV Angel, Vikram Pandit, and Tom Glocer invested in Fundbox. In 2015,
Fundbox went through its series B investment round, raising $40 million from General Catalyst
Partners, NyCa Investment Partners, Khosla Ventures, Shlomo Kramer, and Blumberg Capital.

Fundbox is currently based in San Francisco and has over 70,000 clients. Fundbox has raised
over $100 million cumulatively, and its partners include Intuit Quickbooks, Freshbooks, Xero,
Harvest, and Zoho

Zooz currently has raised $40 million cumulatively and has operations in Israel, Europe, and the
United States. Zooz’s clients include a variety of high-profile businesses, such as Gett Taxi and
Burberry Luxury Brand

Zooz

Zooz is a financial services firm founded in 2010 by Eyal Kotler, Oren Levy, and Ronen Morecki.
Zooz provides a digital payment platform that allows merchants to utilize various payment
technologies and connect with multiple payment providers. The main goal of Zooz’s platform is
to function as a routing platform for merchants and businesses, enabling them to connect with
as many payment providers as possible. Zooz achieves this by giving clients the opportunity to
interact with multiple financial institutions, by integrating various acquirers, e-wallets,
alternative payment methods, and fraud management, and by thoroughly routing transactions
through the whole payment process. Furthermore, Zooz analyzes payment data and provides
merchants with relevant information, allowing them to customize customer experience both
online and in retail stores. In conclusion, Zooz aims for a high level of global payment efficiency,
cost reduction, rate decreases, and consumer data protection.

I Know First

I Know First is a Fintech company that provides state of the art AI-based self-learning
algorithmic forecasting solutions for the capital markets to uncover the best investment
opportunities. I Know First was selected as a Top 3 Fintech company in Europe in the European
Fintech Awards 2017. I Know First has clients in over 50 countries and makes predictions over
40 markets across the world and considered one of the Top fintech companies in Israel.

The underlying technology of the algorithm is based on artificial intelligence, machine learning,
and incorporates elements of artificial neural networks and genetic algorithms through which
we analyze, model, and predict the stock market. The algorithm is adaptable, scalable, and
features a Decision Support System (DSS) to optimize the information produced by the years of
data inputted.

The algorithm generates daily market predictions for stocks, commodities, ETF’s, interest rates,
currencies, and world indices for the short, medium and long term time horizons.

The I Know First algorithm is designed for large financial institutions, banks, and hedge funds in
the capital market as well as private investors looking for an advanced algorithmic support
system. The algorithm is currently tracking and predicting a growing universe of over 10,000
financial assets.

I Know First is adaptable and scalable, allowing comprehensive, customized algorithmic

solutions including integration of additional markets according to client needs. Its uniqueness
also lies in its accessibility to all types of people apart from professional investors. The company
is working with a loyal and growing client-base, including wealth management firms, hedge
funds, fund management partnerships, family offices, financial advisors and professional
investors from around the world.