Fintech Investments in April Dip to $29 Million: The Digital Fifth Report
- ByStartupStory | May 24, 2024
The fintech sector in India saw a notable decline in investment activity in April, with only $29 million being funneled into the space, according to a report by BFSI consulting firm, The Digital Fifth. This brings the cumulative investments in the calendar year 2024 to $203 million.
A significant portion of the funding in April was directed towards companies specializing in payment services, particularly in the cross-border payments domain. Additionally, startups in the loan marketplace segment also attracted investor interest. Overall, nine startups received funding this month, with much of it being seed-stage funding.
Gurgaon emerged as a key hub, accounting for 33% of the funded companies in April. BankBazaar topped the list as the highest-funded startup, securing $9.6 million. Other notable startups that received funding include insuretech company Claimbuddy, cross-border payments firm BriskPe, and paytech enabler Innoviti.
The infusion of capital is expected to drive these companies towards accelerated product development, market expansion, and potential strategic partnerships or acquisitions. Investors are keen on supporting startups that demonstrate high levels of innovation across various segments.
Cross-border payments, known for their complexity, high costs, manual processes, lack of transparency, and reconciliation issues, present significant opportunities for innovation. This sector has drawn substantial investor interest, with startups like BriskPe leveraging the OPGSP framework to simplify and enhance transparency and speed in small-value cross-border payments for MSMEs.
So far in 2024, companies such as Perfios, IDfy, and Mswipe have secured the highest funding in the Indian fintech space. Sameer Singh Jaini, founder and CEO of The Digital Fifth, expressed optimism for future investments, particularly in segments like enterprise fintech, embedded finance, MSME lending, secured lending, and wealth/insurance. These areas are expected to attract substantial investments driven by cutting-edge innovations and growing investor interest.
Investments in the first four months of 2023 stood at $1572, as compared to $203 million this year. The Digital Fifth’s month-by-month analysis of fintech investments over the past two years reveals a persisting slowdown. The analysis shows that only the most ground-breaking innovations have received funding, which signals investors’ increasing selectivity. On a pan-India basis, Bangalore has remained at the epicenter of the fintech ecosystem in the country.
