India’s FinTech funding slumps in H1 2024 amid global slowdown, geopolitical tensions: Tracxn Report
India’s fintech sector recorded a decline in funding actions in 2024, in keeping with Tracxn FinTech Report. The sector obtained funding of $795 million in 2024, a decline of 11 p.c and 59 p.c in comparison with $896.7 million raised in H2 of 2023 and $1.93 billion in H1 of 2023, respectively. Solely two $100 million+ funding rounds took in 2024 to date.
Bengaluru led the funding within the Indian fintech area, adopted by Mumbai and Pune. Peak XV Companions, Y Combinator, and LetsVenture emerged because the main traders within the sector.
Tracxn, a number one market intelligence platform launched its Geo Annual India FinTech Report H1 2024 on funding developments, section performances and notable developments within the Indian FinTech sector for 2024.
Nonetheless, India’s fintech ecosystem achieved a major milestone in H1 2024, rating among the many prime three funded globally alongside the US and UK. Regardless of this achievement, the sector has confronted substantial funding challenges.
This decline displays international developments influenced by the continuing funding winter and geopolitical uncertainties, regardless of the sturdy efficiency of the Indian economic system, which registered an 8.2 p.c GDP development charge for FY24 and is projected to keep up a 7.2 p.c charge in FY25.
Stagewise break up
Late-stage funding in H1 2024 stood at $551 million, a 26 p.c enhance from $436 million in H2 2023 however a 63 p.c lower from $1.5 billion in H1 2023. Early-stage rounds recorded $179 million, exhibiting a major decline of 55 p.c from $401 million in H2 2023 and 50 p.c from $361 million in H1 2023. Seed-stage funding amounted to $65 million, a 7.4 p.c rise from $60.5 million in H2 2023 however a 43 p.c discount from $114 million in H1 2023.
Based on the report, a quarterly evaluation revealed that Q1 2024 contributed $582 million to the overall funding, representing a 55.6 p.c drop from $1.31 billion in Q1 2023. The Q2 of 2024 noticed solely $214 million in funding, a 65 p.c lower from the identical interval final 12 months. Two funding rounds of over $100 million have been recorded in H1 2024 in comparison with only one in H2 2023.
Noteworthy rounds included Avanse’s $120 million Sequence C and Credit score Saison’s $144 million Sequence D, underscoring continued curiosity in key gamers regardless of total funding declines.
High performers
Various lending, RegTech and BankingTech have been the top-performing segments within the Indian FinTech sector. The choice lending section secured $646 million, which, regardless of being a 17.4 p.c enhance from H2 2023, marked a 27 p.c fall from H1 2023. This section alone accounted for 81 p.c of the overall funding within the Indian FinTech area, pushed by digital lending options that improve monetary inclusion throughout the nation.
The RegTech sector noticed a 50 p.c drop in funding, accumulating $118 million in comparison with H2 2023’s $238 million, whereas Banking Tech obtained $115 million, down 65 p.c from $328 million in H2 2023 however up 118 p.c from $52.8 million in the identical interval final 12 months.
Neha Singh, Co-Founder at Tracxn, stated, “Regardless of the worldwide funding slowdown, India’s FinTech ecosystem reveals agility and adaptableness, supported by sturdy financial fundamentals. The slowdown in funding displays the necessity for a cautious outlook and strategic planning amongst startups and traders. Our FinTech sector stays dynamic, and we’re optimistic {that a} supportive coverage surroundings and technological developments will create new alternatives for development and innovation within the close to future.”
Meet the traders
Peak XV Companions, Y Combinator and LetsVenture have been the all-time prime traders in FinTech funding area. Enterprise Catalysts, Y Combinator and BeeNext led the seed investments; Peak XV Companions, Sorin, and Quona have been distinguished traders in early-stage investments; and Epiq Capital Advisors, UC-RNT Fund, and Amara Companions have been the main late-stage traders in 2024.
Perfios emerged as the one unicorn in H1 2024, whereas there have been no unicorns in the identical interval in 2023. Acquisition exercise additionally witnessed steep decline at six acquisitions, a 66 p.c decline, in comparison with 18 in H1 2023.
Moreover, 5 firms went public within the first half of 2024, contrasting with no IPOs within the corresponding interval final 12 months.
