Tracxn Geo Quarterly India FinTech Report

Key Highlights

• Total funding received by the FinTech sector increased by 59% in Q1 2024, compared to Q4 2023

• India has become the third-highest-funded startup ecosystem across the globe

• Only two $100 million+ funding rounds have taken place in Q1 2024

• Only one unicorn was created in Q1 2024, with 4 acquisitions and 2 IPOs

• Bengaluru led the funding in the Indian FinTech space, followed by Mumbai and Hyderabad

• Peak XV Partners, Y Combinator, and LetsVenture emerged as the leading investors in the sector

Tracxn, a leading market intelligence platform, has unveiled its Geo Quarterly India FinTech Report- Q1 2024. The report provides valuable information on funding trends, sector performances, and notable developments in the Indian FinTech sector for the first quarter of 2024.

As per the report, India secured the third position globally in terms of funding raised for the FinTech sector in Q1 2024. This achievement emphasizes the robustness of the Indian FinTech landscape amidst a dynamic economic environment. Q1 2024 witnessed a total funding of $551 million, marking a notable increase of 59% compared to the $346 million raised in the previous quarter (Q4 2023). However, it reflected a 57% decline compared to the $1.3 billion raised in Q1 2023.

Q1 2024 witnessed a significant 75% drop in seed-stage funding, which was at $9.9 million compared to  $39.2 million in the previous quarter. Early-stage funding saw a 35% drop from $227M raised in Q4 2023 to $147 million in Q1 2024. Only late-stage funding rounds witnessed a phenomenal rise of 392% to $394 million, compared to $80.1 million in Q4 2023.

The Indian economy exhibited a robust performance in the previous quarter, with a growth rate of 8.4%. According to the IMF report, India will become the third-largest economy in the world by 2027, with a GDP of over $5 trillion. The government of India remains steadfast in its commitment to bolstering the technological ecosystem within the country. Since the inception of the Startup India Initiative in 2016, various schemes and initiatives have been introduced to foster the growth of India’s startup landscape.

The report highlights that the sector witnessed significant growth in specific segments, with Alternative Lending, RegTech, and Banking Tech emerging as top performers in Q1 2024.

Alternative Lending accounted for almost 89% of the total funding, clocking a remarkable growth of 290% compared to the $126 million raised in Q4-2023, reaching $491 million in funding.

RegTech, the second-highest funded sector, received funding of $107 million.

Banking Tech, the third-highest funded sector, received funding of $85.8 million in Q1 2024, which is a growth of 187% compared to the $29.9 million in funding witnessed in Q4 2023, benefiting substantially from record-breaking UPI transactions and digital banking’s widespread adoption due to rising internet and mobile device penetration in cities and rural areas.

Speaking at the launch of their report, Neha Singh, Co-Founder Tracxn, said, “We’re pleased to observe India’s FinTech sector’s resilience amidst global economic shifts. Our Q1 2024 findings emphasize the sector’s innovative capabilities and its potential to drive India’s economic expansion. The sustained investor interest emphasizes the importance of nurturing startups and R&D, aligning with the Startup India Initiative. This surge reflects the industry’s dynamism and innovation, positioning India as a leading global FinTech player.”

The quarter saw four acquisitions, a 43% drop from seven acquisitions in Q4 2023. A notable acquisition was Difenz, a fraud risk management platform that was acquired by Signzy for $5 million

Two companies, Medi Assist and IBL Finance, went public in Q1 2024, showcasing the growing maturity of the Indian FinTech ecosystem.

Bengaluru emerged as the leader in total fintech funding raised during Q1 2024, followed closely by Mumbai and Hyderabad, reaffirming the significance of these cities as fintech hubs in India’s startup landscape.

Peak XV Partners, Y Combinator, and LetsVenture are the all-time top investors in the space. Saison Capital, Hem Angels, and Capital A led the seed investments in Q1 2024, while Peak XV Partners, RTP Global, and Asha were prominent in early-stage investments. Elev8, Epiq Capital Advisors, and UC-RNT Fund are the leading investors actively involved in late-stage in Q1 2024.

About Tracxn:

Tracxn Technologies Ltd. is a data intelligence platform for private market research, tracking 2.5 million entities through 2600+ 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.