top of page

PMF is enough to succeed in the fintech industry

Fintech in India is witnessing the fastest growth due to factors such as financial inclusion, the rise of e-commerce startups, wealth management, and the widespread adoption of technology, among others. While India has become a haven for fintech startups to thrive, on the flip side, several companies have encountered challenges for various reasons. It is commonly believed that product-market fit is the sole crucial factor for success in the fintech industry. However, there is much more beyond product-market fit for a fintech company to endure and survive in the long run. 


Let's delve deeper into how certain startups encountered challenges to survive in the long run. Take, for instance, Freecharge, founded in 2010, which facilitated utility payments and offered attractive cashbacks and discount offers faced stiff competition from Paytm and Mobikwik, primarily due to difficulties in allocating sufficient funds for marketing. Unlike its rivals, Freecharge did not prioritize low-ticket transactions, leading to challenges in establishing itself as a prominent player in the industry. This illustrates that not only does product-market fit contribute to a company's success, but there are also factors beyond that, such as marketing efforts and competitor advantage, that play a crucial role in becoming a prominent player in the market. 


Established in 2017, Koinex was a multi-cryptocurrency exchange and trading platform that fueled the blockchain-powered Internet. The company faced failure due to regulatory issues when, in 2018, the RBI instructed all financial institutions in India to sever relationships with companies dealing in virtual currency and block all crypto-related transactions. This directive imposed an immense financial burden on Koinex, making it challenging for the platform to continue its operations. Similarly, other companies like Zebpay and Coinome also had to shut down due to similar issues. 


Factors considered important for a fintech company to succeed: 

  • Operating within the legal and regulatory compliance 

  • Adhering to data privacy regulations not only safeguards sensitive information but also fosters trust in handling data 

  • Staying ahead of competitors by establishing an economic moat necessitates innovation and customer-centric approaches 

  • Strategic planning is critical as it prioritizes risk mitigation, scalability, and adaptability to navigate challenges in the dynamic landscape 


In conclusion, while product-market fit is a crucial factor, companies must address other key factors and KPIs to succeed in the industry and establish a prosperous presence in the dynamic fintech landscape. It is important to understand that product-market fit is not the sole determinant of long-term viability and prosperity. There are various examples of fintech startups that have failed, despite having the right business model and achieving product-market fit. Therefore, there are many factors beyond this that contribute to achieving sustainable growth. 


17 views0 comments


bottom of page