BENGALURU — India secured the third position globally in terms of funding
raised for the fintech sector in Q1 2025, following the US and the UK, a report
showed on Tuesday.
A majority of the funding in this space has been seen in the
late-stage rounds. Late-stage funding witnessed a 47 per cent increase to $227
million in January-March period, compared to $154 million raised in Q4 2024,
said the report by Tracxn, a leading market intelligence platform.
The first quarter of this year witnessed a total funding of
$366 million. March was the most funded month of the quarter, with $187 million
raised, accounting for 51 per cent of the total funds.
The Indian economy faced bearish stock trends, US-imposed
tariffs, global trade tensions, and rising inflation discouraging venture
capital inflows.
Despite these challenges, India's GDP growth for FY 2025 is
projected to remain resilient at approximately 6.5 per cent.
Furthermore, the rising acceptance of UPI beyond Indian
borders in countries like Singapore, Nepal, and Sri Lanka presents a
significant opportunity for Indian fintech players to expand operations
overseas and attract more capital into the sector, according to the report.
The sector witnessed significant growth in specific
segments, with banking tech, Internet-first insurance platforms, and investment
tech emerging as top performers in Q1 2025.
Banking tech, the highest-funded sector, received a funding
of $108 million, a 9 per cent increase compared to the $99 million observed in
Q1 2024 and a substantial increase of 1,700 per cent compared to $6 million
raised in Q4 2024, accounting for 29.59 per cent of the total funds raised in
Q1 2025 in this ecosystem, said the report.
Neha Singh, Co-Founder Tracxn, said, "The Indian
fintech sector continues to evolve despite market fluctuations. While funding
levels have declined, the industry's long-term growth potential remains
strong”.
“With increasing regulatory clarity, digital payment
expansion, and a rising global footprint, we anticipate exciting opportunities
for fintech startups in the coming years,” she mentioned.
The quarter witnessed 10 acquisitions, reflecting a 67 per
cent and 100 per cent increase compared to that of 6 and 5 acquisitions in Q1
2024 and Q4 2024, respectively.
Bengaluru emerged as the leader in total fintech funding
raised during Q1 2025, followed closely by Gurugram and Mumbai, said the
report.
