10 Essential Things Every First-Time Fintech Founder Must Know

These are some of the learnings I learn't while building a fintech business and working in the financial sector! And hope this helps you!

My entire life has been in the traditional finance and fintech ecosystem. My first job was at HSBC on the tech side. After that, I pursued my Master’s in Finance from Texas A&M College Station. Then, I came back to India and started working at India’s first crypto exchange, Koinex, and later moved to FloBiz, a Neo-banking app for SMEs. After all this experience, I started Fello, a gamified savings and investing app for young millennials.

During this entire period from 2015-2025, the experiences and learnings have been massive. Fintech looks fancy on the outside, but there are a lot of things you need to know on the inside. If you are building a fintech business, you have to be very much ready for the challenges.

1. A Simple Regulatory Change Can Kill Your Business in Hours

Regulators like RBI and SEBI are here to protect the people. In the last few years, we have seen huge growth in tech and innovation, which also gave rise to frauds and businesses circumventing laws to offer services. RBI and SEBI have been imposing several regulations frequently.

I have lost count of the number of businesses that died within a week, scraping off months and years of effort over a single regulatory change. This is real! If you are planning on building a fintech business, you need to be malleable, prompt, and smart enough to adapt to regulatory changes.

A great example is Slice. When RBI imposed rules on lending via prepaid cards, many businesses were impacted. While everyone was figuring out their next move, Slice acquired a stake in a bank based out of Assam and continued running its business. This speaks volumes about the smartness of the founder and the team. Ask yourself—do you have that level of promptness and smartness?

Also, STAY AWAY FROM UNREGULATED AND GREY AREAS IN FINTECH!!! Write these words down and follow them promptly!

2. Networking is King in Fintech

Trying to get a banking relationship? Planning on applying through a bank’s startup portal? Then, my friend, you will never build a business. Those portals don’t work! Even if they do, the time taken for you to be heard by the decision-maker is painfully long.

You need to have a strong network and connections. Without banking or regulatory connects, building a fintech business is next to impossible. Your CEO or COO must be a solid networking person who knows people across banks and fintech domains.

3. If Your Business is Only Into Distribution of Savings/Investing Products, You Will Die Sooner or Later

Are you planning to start a savings app? Hoping to hit $100M ARR with it? Let me tell you the harsh reality—savings applications across mutual funds, digital gold, P2P, bonds, etc., offer commissions of just 0.05% to 2%.

Even at 2%, you need an AUM of $50M (₹434 Crores) to make $1M ARR. For digital gold, you don’t even earn on AUM, but on transaction volume—just once! So, every year, you need to attract $50M just to hit $1M revenue. The solution? Either become the manufacturer of the products or launch complementary products to boost revenue.

A great example is Groww. They started with mutual funds and expanded into investments, credit, and more, eventually becoming profitable.

AIM TO BE A PRODUCT MANUFACTURER AND NOT A PRODUCT DISTRIBUTER. MONEY IS WITH THE MANUFACTURERS IN FINTECH. And I say it in bold because that’s been one of my biggest learnings.

4. In B2C Fintech, Distribution Channels Are Saturated

No one will tell you this, but I will. India has reached a saturation point in go-to-market channels for B2C fintech products. Every platform has tried everything—performance marketing, affiliates, influencers, channel partners, offline, partnerships—almost every GTM strategy under the roof.

Currently, even the best-performing channels push the platforms that pay the most. I might be wrong in the future with AI agents penetrating this space, but as of today, it is saturated. Content and organic traction are the biggest diversification you should focus on if you are entering B2C fintech.

5. The Performance Cost of Acquisition is Extremely High in B2C Fintech

Brace yourself. You are entering an industry where customer acquisition costs (CAC) are skyrocketing year by year. Google and Meta campaigns are in a bidding war, and during the festive season—the best time for B2C fintech apps—the numbers are mind-boggling.

You need exceptional ad creatives to lower costs. At Fello, we optimized CAC through numerous experiments—analyzing which face, background, word, and language performed the best. You need to reach this level of detail to win. I’d be glad to help fintech founders with this—feel free to reach out.

6. You Need Multiple Revenue Channels if You Are B2C

This one is in line with point #3. Read the end notes of point #3 again.

7. Subscriptions Don’t Work in India for B2C, Except for a Few Niches

In the West, Neobanks like Nubank, Chime, and Cleo are minting millions of dollars in subscription revenue. But in India, people don’t pay for banking services. Most bank accounts are zero-balance, and most credit cards are lifetime free.

Subscription models work only for specific niches:

• HNIs pay for premium credit cards.

• High-salaried individuals pay for financial advisory.

• Traders pay for market data or trading suggestions.

8. The Best Revenue generating business models Are in B2B and Certain B2C Niches

There’s a saying: “A second-time founder prefers B2B because they know the challenges of B2C.”

Profitability, scaling revenues, and dealing with fewer consumer personas make B2B attractive. Razorpay is a perfect example. Even many B2C companies eventually pivot to B2B. Some P2P lending platforms, for example, started with a B2C approach but shifted to institutional lending.

In B2C, trading platforms, financial advisory for HNIs, tax support, and insurance have shown long-term revenue potential.

9. A Strong Compliance & Legal Team is a Must

You will face legal cases. You will deal with the police—even when you’re not at fault. Your bank accounts may get frozen, and you will feel helpless. Even if you are fair, you can lose.

If you don’t have a solid compliance and legal team, don’t run a fintech company. You’ll waste time fighting legal battles instead of growing your business. If you are looking for a good compliance experts and consultants, I have met some good folks like Eashwari, Sarath and Beejish (Groww).

10. Getting Licenses is Tough and Takes Time

If you think getting a fintech license is easy, you are in a bubble.

Licenses require a strong network, reputation, and patience. Some licenses are near impossible without the right connections. Wint Wealth is a great example—they built credibility, delivered excellent services, and earned their licenses over time.

So these are some of the things about fintech business which you should know as a first time founder. I have so much more to share with you which I will share in future blogs.

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🚀 If you’re a founder in fintech or an aspiring founder looking for guidance, feel free to reach out! I’d love to help.

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Keep building, Keep inspiring! Because you are the best!

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