2024 sees Indian fintech raise the least funding in 3 years

This represents a decline in funding from the previous years. It decreased 33% from the $2.8 billion secured in 2023, and tumbled 66% from the $5.6 billion raised in 2022.

Bengaluru: India’s financial technology (fintech) sector raised a total of $1.9 billion in 2024, according to a report by market intelligence platform Tracxn out on Monday. 

This represents a decline in funding from the previous years. It decreased 33 per cent from the $2.8 billion secured in 2023, and tumbled 66 per cent from the $5.6 billion raised in 2022.

Over the year, the third quarter of the year (July to September) was the highest-funded period, with $805 million raised. This was a 61 per cent increase compared to the same quarter in 2023. August alone saw $434 million raised.

Overall, 59 per cent of the total funding in 2024 was secured during the second half of the year, indicating a late-year recovery. The decline was driven by a global funding slowdown, a broader downturn in demand, and geopolitical headwinds. Globally, India ranked third in terms of fintech funding received in 2024 (following the US and the UK). There were only three $100 million-plus funding rounds recorded, marking a reduction from the six such rounds in 2023. 

Acquisitions also saw a dip, with 26 recorded in 2024, down from 31 in 2023.

The downturn hit all the funding stages, with late-stage rounds being the most affected. Late-stage funding amounted to $1.1 billion, marking a 42 per cent reduction compared to the $1.9 billion raised in 2023 and a 65 per cent decline from $3.1 billion in 2022. 

In terms of fintech segments, digital lending solutions accounted for 64 per cent of the total funding raised during the year. This sector is poised for further growth in the coming years, according to the report.

The payments segment experienced a sharp decline, attracting $194 million, a 77 per cent drop from $836 million in 2023. The investment tech segment garnered $320 million in funding in 2024, reflecting an 11 per cent decline from the $358 million raised in 2023. 

Despite the slowdown, the sector saw eight IPOs in 2024, compared to two IPOs in 2023. There were also two unicorns in 2024 (Money View and Perfios), compared to one in 2023.

Bengaluru maintained its leadership as the top hub for fintech funding in 2024. 

Among investors, Peak XV Partners, LetsVenture, and Y Combinator emerged as the top contributors.

As the Union Budget approaches, further monetary policy support is anticipated.