Embedded finance can unlock $25 billion revenue opportunity for India’s digital and financial services platforms by 2030, a report showed on Tuesday.
Embedded finance means where financial services can exponentially expand customer reach by directly integrating within everyday consumer platforms, open digital networks and supply chains.
According to the report by Elevation Capital, India’s leading early-stage venture capital firm, large consumer platforms in e-commerce, travel and mobility space are projected to serve 400-450 million users by FY30 and embedding contextual financial services here will unlock a $10-15 billion revenue opportunity.
The second opportunity is through India’s unique open digital networks, such as the government’s Open Network for Digital Commerce (ONDC). It is estimated that, collectively, financial services via these networks could generate a potential annual revenue of more than $5 billion by FY30.
The third opportunity lies in embedding lending and insurance for MSMEs via rapidly digitising supply chains.
Supply chain finance and supply chain insurance now represent a compelling $10-12 billion opportunity by FY30, said the report.
“This transformation has been a decade in the making, fuelled by the creation of public rails and DPI (such as UPI, KYC, GST), the establishment of large digital channels (spanning both consumer and supply chains), the widespread adoption of new-age core software and middleware, and the acceleration of manufacturing innovation,” explained Mridul Arora and Vaas Bhaskar, Partners, Elevation Capital.
In this context, embedding financial products is the most effective way to drive product/ market penetration.
“We don’t see this as just a topline opportunity but as a potential to improve retention, increase affordability and more. We see considerable new value creation in in distribution, manufacturing and software,” they added.
Elevation Capital said it has deployed over $2.6 billion of capital in more than 190 companies.
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