In an interaction with TechGraph, Tanul Mishra, Founder of Afthonia Labs, outlined how India’s fintech and insurtech founders are leveraging public digital infrastructure such as UPI, Aadhaar, and account aggregators to accelerate financial innovation, and how her team is supporting this shift by helping startups design trusted and inclusive products that address underserved segments and create lasting user value.
She also spoke about how the company strengthens founder readiness through structured programs focused on financial discipline, capital efficiency, and partnerships with investors and regulated entities, helping early-stage insurtech and fintechs build operational depth, investor confidence, and sustainable business models that balance innovation with responsibility.
Read the interview in detail:
TechGraph: In the last few years, regulations around digital lending, KYC, and data protection have changed the way fintechs operate. Since Afthonia works with very early-stage founders, how do you see them rethinking their models so that they can stay compliant while still experimenting with new ideas?
Tanul Mishra: Early-stage fintechs today can’t afford to treat compliance as an afterthought. At Afthonia, we see founders building with a ‘compliance-by-design’ mindset, whether through trusted KYC integrations or partnering with regulated entities.
It is also about staying updated and keeping pace with the news, which provides an early indicator on how you can adapt faster. Regulation isn’t just a hurdle; when embraced early, it becomes a moat and a real competitive advantage.
TechGraph: UPI has already reset expectations in payments, and founders are now looking for the next breakthrough. From what you are seeing inside the incubator, which themes or problem areas seem to be drawing the most serious entrepreneurial energy?
Tanul Mishra: After UPI transformed payments, we’re seeing founders channel their energy into areas like credit access for underserved segments, embedded finance, and new-age wealth management.
Alternative credit scoring, debt consolidation, and community-driven financial platforms are drawing strong interest. The common thread is solving for trust and inclusivity, building financial products that go beyond transactions to create long-term value for users.
TechGraph: Insurance in India has struggled with low penetration despite years of digital initiatives. Among the insurtech founders you mentor, what fresh approaches to product design and distribution suggest that this market could finally open up in a meaningful way?
Tanul Mishra: Insurance in India has long struggled with penetration because products felt complex and distribution was push-driven. Adoption of Insurance products in India has been driven as a savings-led instrument or because it is mandated, such as motor insurance.
The new wave of insurtech founders is simplifying design, creating bite-sized, contextual policies, and rethinking distribution through ecosystems, communities, and embedded models. By meeting users where they are, insurance finally has a chance to move from being sold to being adopted.
TechGraph: Investor priorities in fintech have shifted from rewarding rapid growth to asking tougher questions about profitability and exits. How do you prepare your startups for this new reality, and what signs give you confidence that they are building businesses with genuine staying power?
Tanul Mishra: Investor expectations have shifted, growth at any cost no longer works, and this is a welcome move. At Afthonia, we have always focused on preparing founders by making unit economics, compliance, capital utilization, and resilience part of their DNA from the start.
What gives me confidence is seeing teams focus on sustainable revenue models, partnerships with regulated players, and products that solve real customer pain points. Those are the businesses that will endure.
TechGraph: Embedded finance is widely spoken of as the next opportunity in financial services, yet adoption has been uneven. Do you see real momentum building among the startups inside your incubator, and what conditions will make it easier for embedded finance to scale in India?
Tanul Mishra: Embedded finance is definitely drawing momentum among the founders we work with, especially in lending, insurance, and wealth, where integration into existing platforms unlocks reach. The real accelerators will be trusted API infrastructure, clear regulatory guardrails, and partnerships with incumbents who are open to collaboration. When these align, embedded finance in India can scale far faster and more meaningfully than we’ve seen so far.
TechGraph: Many fintech and insurtech ventures in India are built on public digital infrastructure such as Aadhaar, UPI and account aggregators. When you guide founders, how do you advise them to build resilience and differentiation in businesses that depend so heavily on platforms they do not control?
Tanul Mishra: Public digital rails like Aadhaar, UPI, and account aggregators are huge enablers, but they also level the playing field. We advise founders to build resilience by treating these rails as a foundation, not the product.
Differentiation comes from what you layer on top: customer experience, trust, data-driven insights, and solving very specific problems. That’s what creates defensibility when the infrastructure itself is open to all.
TechGraph: With AI now moving rapidly into underwriting, fraud detection, and customer service, what practical opportunities and risks are your founders most engaged with, and do you see AI becoming central to how Indian fintech and insurtech startups differentiate themselves?
Tanul Mishra: AI is no longer theoretical in fintech; our founders are already applying it to underwriting, fraud detection, and customer support. The opportunity lies in using AI to make faster, fairer credit decisions and deliver more personalized services at scale. The risks, of course, are around data bias, privacy, and explainability.
I do believe AI will become central to how Indian fintech and insurtech startups differentiate; the winners will be those who combine intelligent automation with trust and transparency.
