FinTech Records Decline in Funding in First Half of 2024: Tracxn Report According to a recent report by Traxcn, India's fintech sector recorded a decline in funding activities in 2024. The report named 'Tracxn FinTech Report' states that the sector received funding of USD 795 Million in 2024, marking a decline of 11 per cent and 57 per cent compared to the USD896.7 Million second half of 2023 and USD 1.93 Billion in the first half of 2023 respectively.
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According to a recent report by Traxcn, India's fintech sector recorded a decline in funding activities in 2024. The report named 'Tracxn FinTech Report' states that the sector received funding of USD 795 Million in 2024, marking a decline of 11 per cent and 57 per cent compared to the USD896.7 Million second half of 2023 and USD 1.93 Billion in the first half of 2023 respectively.
Citywise breakup showed that funding in Bengaluru led the race, followed by Mumbai and Pune. Leading investors in the space emerged to be Peak XV Partners, Y Combinator, and LetsVentuure.
According to the report named 'Geo Annual India FinTech Report H1 2024 on funding trends', India's fintech ecosystem ranked among the top three next to the US and UK. Despite the ranking, numbers show a significant decline. Expert opinions about the ongoing funding winter have had its effect, along with geopolitical uncertainties further influencing the decline.
The report also said that a quarterly analysis revealed that the sector recorded USD 582 Million in Q1, marking a 55.6 per cent drop from USD 1.31 Billion in Q1 2023. The second quarter however saw a meagre USD 214 Million, a steep 65 per cent decrease from the Q2 2023.
Avanse's USD 120 Million Series C and Credit Saison's USD 144 Million Series D came out as standout funding rounds.
RegTech, BankTech, and Alternative lending came out as top-performing segments, with the lending space securing USD 646 Million. The segment contributed 81 per cent to the total funding into the FinTech sector in India.
RegTech however, saw a 50 per cent drop, securing USD 118 Million in comparison to the USD 238 Million in H2 2023. The Banking technology sector bagged USD 115 Million, which registered a dip of 65 per cent from USD 328 Million in H2 of 2023.
Neha Singh, Co-Founder at Tracxn, said that despite the global funding slowdown, India's FinTech ecosystem shows agility and adaptability, supported by robust economic fundamentals and 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," said Neha Singh.
With Peak XV Partners, Y Combinator, and LetsVenture being the all-time top investors in the FinTech funding space, Venture Catalysts, Y Combinator, and BeeNext emerged as the leaders in seed investments. Peak XV, Sorin, and Quona dominated the early stage whereas Epiq Capital Advisors, UC-RNT Fund, and Amara Partners led the late-stage funding in 2024.
The only unicorn to emerge out of H1 2024 was Perfios. With the major IPO spree happening in the country, the FinTech space saw five companies announcing IPOs in H1 2024.
