When FinSight Ventures’ lead India investments, Pavel Gurianov, relocated to Bengaluru from Russia in 2014 ,his mission was clear: to understand why VCs around the world were falling head over heels for India’s consumer tech and fintech startups.
12 years and 16 investments later, Gurianov’s view of India is optimistic but pragmatic. While India’s fintech ecosystem has been an undeniable success from a global investment perspective and remains a key focus area for overseas funds, some nuances repel investors.
For instance, from the dollar-investor perspective, Indian fintech startups are expensive when compared to Southeast Asia or Latin America. Then, despite the massive scale of digital payments, average transaction values in India are still relatively small, which slows revenue growth for fintech companies.
Currency depreciation and capital gains taxes, which can reduce IRR for foreign investors, are some of the other investor pet peeves. Finally, regulatory blockades and weak unit economics of startups further dent the investment sentiment.
On the contrary, Gurianov believes India offers durable growth for 10-15 years, unlike some emerging markets where growth may be rapid but short-lived. Also, UPI has triggered a boom in digital transactions, drawing major VCs, such as SoftBank and Tiger Global Management, to place large bets on India’s fintech opportunity.
“One of our earliest success stories in the consumer tech space is Bumble. We exited with very good returns in 2019. We have also invested in large fintechs in the US. But, we realised that some of the best fintech companies are also being built outside the US, and India definitely became a focus,” Gurianov said.
FinSight Ventures traces its roots to Russia’s early internet era of the early 2000s. It has since evolved into a globally diversified growth-stage fund with a portfolio spanning South Korea, Uzbekistan, the MENA region, and India.
FinSight Venture’s India portfolio comprises Razorpay, Easy Home Finance, Gupshup, Medibuddy, and Car Dekho, just to name a few.
Speaking with Inc42, Gurianov highlighted how factors like regulatory maturity, capital depth, and large untapped financial opportunities in sectors such as housing finance and consumer lending have shaped FinSight Ventures India’s investment thesis.
Building An India Strategy: From Fund Of Funds To Direct Bets
Finsight’s India journey began cautiously, learning the ecosystem before committing. Gurianov said that the Indian market appeared on the VC firm’s radar when it was analysing where the next wave of high-growth opportunities could emerge.
“We realised that great companies are not going to appear only in the US. We started exploring all other emerging markets — Latin America, Indonesia, Africa — and then we came to India,” he said.
Before writing any direct checks, FinSight invested in four local VC funds — not for returns but for access and market education. That foundation eventually gave FinSight Ventures the confidence to invest directly into Indian ventures.
The fund’s current cheque sizes average around $20 Mn per deal, with flexibility to go as low as $10 Mn or as high as $40 Mn, depending on the opportunity.
Its primary focus areas are consumer super apps and financial services companies. These are the categories in which the fund sees durable structural tailwinds in India and similar markets such as South Korea and Uzbekistan.
“Right now, India is an important piece of our strategy. I believe there is an opportunity to invest in maybe three or four companies in India in the financial sector or consumer sector again,” Gurianov said. He, however, added that the current focus is on growth stage companies that have proven revenue models, sustainable unit economics, and are aligned with India’s regulators.
The Valuation Paradox
Right now, Gurianov is looking at two to three investments in the Indian fintech market. He has a peculiar take that Indian fintech startups are pricier than their global counterparts.
FinSight Venture’s principal, however, believes that being expensive is not irrational, given the long-term value these companies hold.
On the specific question of valuation multiples, Gurianov does not say that the market is cheap.
For a dollar-denominated investor looking at Indian companies through a standard global lens, the price-to-earnings or price-to-revenue multiples can appear elevated relative to comparable businesses in Southeast Asia, Latin America, or even parts of Europe.
“As a dollar investor, if you simply look at Indian multiples, it is pricey. But you should switch off your dollar investor mentality when investing in India. This is because Indian companies are factoring in much higher long-term growth,” FinSight’s senior investor said.
He also points to several structural factors underpinning India’s premium pricing — the consistent flow of retail liquidity into equities through systematic investment plans (SIPs) via mutual funds; currency exchange controls that prevent large pools of domestic capital from seeking overseas returns, and a growing class of sophisticated local investors — including domestic private equity and family offices — who are willing to pay up for quality assets.
These dynamics have created a self-reinforcing environment where Indian companies command premiums that would be unusual in other markets, according to the lead investor.
The Long Game
For FinSight Ventures, India’s fintech story is less about rapid monetisation and more about long-term compounding. Despite lower transaction values today, the fund sees the country as a durable 10-15 year growth bet.
Gurianov draws a parallel with a US payments giant, Stripe , that processes roughly $1.8 Tn in total payment value annually and is still growing north of 30% YoY at that scale.
In contrast, he said, Indian payment companies move significantly smaller volumes in dollar terms, even as they process billions of UPI transactions every month. The gap between transactional volume and transaction value is one of the central paradoxes of India’s digital payments story.
While India’s payment rails, particularly the UPI, have become genuinely world-class in terms of infrastructure and transaction frequency, the average transaction value remains modest.
According to the investor, this also indicates where the broader Indian economy sits today, fuelled by a large and growing middle class that is still transacting in relatively smaller denominations compared to US or European counterparts.
For investors, this means volume-led narratives around Indian fintechs can sometimes reflect the slow monetisation reality.
Yet Gurianov is not bearish. He says that India’s growth may be slower than some other emerging markets, but it is durable.
“In countries like Kazakhstan or Uzbekistan, you can grow fast, but you can grow for three, four, maybe five years. In India, you can grow slower, but there is a reasonable expectation of this growth to continue for another 10-15 years,” he said.
FinSight evaluates Indian companies on this very durability thesis.
Rather than chasing triple-digit YoY growth, the benchmark many early stage VCs in India still apply, the fund now prioritises sustainability of the business model, quality of the balance sheet, and regulatory alignment of fintech ventures.
“Easy Home Finance, one of Finsight’s more recent Indian investments, is a case study. The mortgage-focused NBFC is not a high-velocity growth story. But it is attacking a problem of enormous structural scale,” Gurianov said.
He estimates that 75% of India’s residential real estate is yet to be built, and the country’s affordable housing finance gap remains vast. “This is not a three-year opportunity but a 15-year compounding one.”
Regulation As A Moat For Indian Fintechs
Any serious conversation about Indian fintech investing eventually arrives at the role of regulation. In Gurianov’s assessment, Indian regulators have shaped the country’s fintech landscape in ways that are simultaneously protective, occasionally frustrating, and fundamentally competent.
“Indian regulators — be it the RBI, IRDAI, or SEBI — are very competent.”
He compares India with markets like the Philippines and Brazil, where digital banking licenses have been available for years, creating more competitive dynamics and broader consumer access. India, on the other hand, has historically been conservative on this front.
Large Indian fintechs like BharatPe and Slice have either partnered or acquired small banks to expand into the digital banking sector after regulatory approvals.
But FinSight’s senior investor senses the regulatory winds shifting. Recent signals from the RBI suggest greater openness to affiliated NBFCs applying for banking licenses, and to small finance banks (SFBs) being permitted to convert to universal banking licenses.
This is expected to have a direct impact on FinSight’s India portfolio, particularly Razorpay, which operates at the intersection of payment infrastructure and financial services, and is eyeing a listing this year.
“India’s most mature startups — those that navigated the compliance-heavy years of building under the RBI’s oversight — are better positioned than their peers in looser regulatory environments precisely because they were forced to build sustainable businesses,” he said.
The VC fund’s exit horizon for its current India strategy is roughly 5-7 years, longer than typical venture timelines but shorter than the decade-plus runway that some early stage India bets might require. For FinSight, the growth stage focus is partly a deliberate effort to compress that holding period without sacrificing upside.
For FinSight Ventures, India’s fintech ecosystem may come with valuation premiums and regulatory complexity, but its structural growth story remains hard to ignore. The country’s vast market, improving regulatory clarity, and long-term demand for financial services will continue to create durable opportunities for patient global investors.
[Edited By Shishir Parasher]
