For fintech startups, the era of chasing growth at any cost is giving way to one where profitability, governance and AI usage are becoming the defining metrics. While funding is more selective now, the opportunity itself has widened, says Sagar Agarwal, founder and managing partner, Beams Fintech Fund. He outlines how fintech is no longer a standalone sector but an invisible layer powering multiple industries, why wealth-tech and financial infrastructure excite him the most, and how the next generation of winners will be built on trust and disciplined execution as much as innovation.
Fintech has evolved rapidly in recent years. How has your investment thesis changed?
When we launched Beams, fintech innovation was largely about digitising access to financial products and expanding financial inclusion. Today, the industry is moving towards intelligence, infrastructure and distribution. Artificial intelligence is reshaping underwriting, fraud detection, collections, customer service and compliance, while embedded finance is integrating financial products directly into consumer and enterprise journeys. We now see fintech as a horizontal layer powering multiple industries, rather than a standalone sector. The next generation of leaders will combine AI-driven decision-making with scalable distribution models.
How has your approach to evaluating startups changed?
Investors today prioritise business quality over growth alone. We focus on sustainable unit economics, governance, capital discipline and a credible path to profitability. In financial services, these factors are even more critical. Rather than a funding slowdown, we see this as a maturation of the ecosystem.
Will fintech’s next phase be driven more by profitability than customer acquisition?
It will be a balance of both. India still offers enormous headroom for financial penetration, making customer acquisition important. The past decade proved that digital models could acquire customers at scale. The next decade will be about building durable, profitable financial institutions where trust, risk management and capital discipline become competitive advantages.
Which fintech segments are you bullish on?
We are particularly optimistic about financial infrastructure, lending technology and wealth platforms. India’s digital public infrastructure — including UPI, Aadhaar and the (RBI’s) Account Aggregator framework — continues to create opportunities for innovation at scale.
Technology-led credit enablement can improve underwriting and expand access to underserved borrowers, while wealth-tech is poised for long-term growth as Indian households shift savings from physical to financial assets. We also see a rising demand for reg-tech and compliance solutions as the regulatory environment becomes increasingly data-driven.