India ranks 3rd globally in terms of FinTech funding received in H1 2024
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The FinTech sector received funding of $795Mn in 2024, a decline of 11% and 59% compared to previous years – $896.7Mn raised in H2 2023 and $1.93Bn in H1 2023, respectively.
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Only two $100 million+ funding rounds have taken place in 2024.
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Perfios was the only unicorn created in 2024, while it saw 6 acquisitions and 5 IPOs.
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Bengaluru led the funding in the Indian FinTech space, followed by Mumbai and Pune.
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Peak XV Partners, Y Combinator, and LetsVenture emerged as the leading investors in the sector.
Bengaluru, July 5, 2024: – Tracxn, a leading market intelligence platform, has unveiled its Geo Annual India FinTech Report H1 2024. The report provides valuable information on funding trends, segment performances, and notable developments in the Indian FinTech sector for the year 2024.
India’s FinTech ecosystem achieved a significant milestone in H1 2024, ranking among the top three funded globally alongside the US and UK. However, despite this achievement, the sector has faced substantial funding challenges.The sector received a total funding of $795Mn, reflecting an 11% decrease from the $896.7Mn raised in H2 2023 and a substantial 59% decline compared to the $1.93Bn garnered in H1 2023. This decline reflects global trends influenced by the ongoing funding winter and geopolitical uncertainties, despite the robust performance of the Indian economy, which registered an 8.2% GDP growth rate for FY24 and is projected to maintain a 7.2% rate in FY25.
The FinTech funding landscape experienced a substantial downturn in 2024. Late-stage funding in H1 2024 stood at $551Mn, a 26% increase from $436Mn in H2 2023 but a 63% decrease from $1.5Bn in H1 2023. Early-stage rounds recorded $179Mn, showing a significant decline of 55% from $401Mn in H2 2023 and 50% from $361Mn in H1 2023. Seed-stage funding amounted to $65Mn, a 7.4% rise from $60.5Mn in H2 2023 but a 43% reduction from $114Mn in H1 2023.
Quarterly analysis reveals that Q1 2024 contributed $582Mn to the total funding, representing a 55.6% drop from $1.31Bn in Q1 2023. Q2 2024 saw only $214Mn in funding, a 65% decrease from the same period last year. Two funding rounds of over $100Mn were recorded in H1 2024, compared to just one in H2 2023. Noteworthy rounds included Avanse’s $120Mn Series C and Credit Saison’s $144Mn Series D, underscoring continued interest in key players despite overall funding declines.
Alternative Lending, RegTech, and BankingTech were the top-performing segments in the Indian FinTech sector. Alternative Lending segment secured $646Mn, which, despite being a 17.4% increase from H2 2023, marked a 27% fall from H1 2023. This segment alone accounted for 81% of the total funding in the Indian FinTech space, driven by digital lending solutions that enhance financial inclusion across the country.
The RegTech sector saw a 50% drop in funding, accumulating $118Mn compared to H2 2023’s $238Mn, while Banking Tech received $115Mn, down 65% from $328Mn in H2 2023 but up 118% from $52.8Mn in the same period last year.
Speaking on the launch of the report, Neha Singh, Co-Founder at Tracxn, said, “Despite the global funding slowdown, India’s FinTech ecosystem shows agility and adaptability, supported by robust economic fundamentals. The slowdown in funding reflects the need for a cautious outlook and strategic planning among startups and investors. Our FinTech sector remains dynamic, and we are optimistic that a supportive policy environment and technological advancements will create new opportunities for growth and innovation in the near future.”
Peak XV Partners, Y Combinator, and LetsVenture were the all-time top investors in the space. In this, Venture Catalysts, Y Combinator, and BeeNext led the seed investments; Peak XV Partners, Sorin, and Quona were prominent investors in early-stage investments; and Epiq Capital Advisors, UC-RNT Fund, and Amara Partners were the leading late-stage investors in 2024.
Perfios emerged as the only unicorn in H1 2024, with no unicorns in the same period in 2023. Acquisition activity saw a steep decline, with only six acquisitions, a 66% decline compared to 18 in H1 2023. Significant deals included PureSoftware, a provider of BPO services for financial, healthcare & other sectors, acquired by Happiest Minds for $94.5Mn, and ET Money, a mutual fund investment platform, acquired by 360 One for $44Mn.
Additionally, five companies went public in the first half of 2024, contrasting with no IPOs in the corresponding period last year. Bengaluru emerged as the leader in total FinTech funding raised in 2024, followed by Mumbai and Pune, further solidifying the emergence of multiple FinTech hubs across India’s diverse startup ecosystem.
About Tracxn:
Tracxn Technologies Ltd. is a data intelligence platform for private market research, tracking 3 million entities through 2700+ feeds categorized across industries, sub-sectors, geographies, and networks globally. It has become one of the leading providers of private company data and ranks among the top five players globally in terms of the number of companies and web domains profiled.
