Fintech startups in the first half of 2024 in India saw a dip of 59 per cent in funding from the year-ago period. According to the data intelligence platform Tracxn, investors poured $795 million in the first half (H1) of 2024 in comparison to $1.93 billion in H1 2023. Quarter-on-quarter, the funding dropped by 11 per cent from $896.7 million, the data showed.
According to Tracxn, the decline reflected “global trends influenced by the ongoing funding winter and geopolitical uncertainties, despite the robust performance of the Indian economy, which registered an 8.2 per cent GDP growth rate for FY24 and is projected to maintain a 7.2 per cent rate in FY25.”
“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, Co-Founder, Tracxn.
Stage-wise, late-stage deals registered the sharpest decline of 63 per cent from $1.5 billion in H1 2023 to $551 million in H1 2024. In comparison, early-stage investments dropped by 50 per cent from $361 million in H1 last year to $179 million in H1 this year and seed-stage funding dropped by 43 per cent from $114 million in H1 last year to $65 million in H1 this year.
Among key segments in the fintech sector attracting capital in the first half this year were alternative lending, regtech, and bankingtech. Tracxn noted that alternative lending attracted $646 million, which despite being a 17.4 per cent jump from H2 last year, registered a 27 per cent decline from H1 last year.
The regtech sector saw a 50 per cent drop in funding, accumulating $118 million vis-a-vis to H2 2023’s $238 million, while bankingtech raised $115 million, down 65 per cent from $328 million in H2 2023 but up 118 per cent from $52.8 million in the same period last year.
Among the leading investors during H1 this year for fintech startups were Peak XV Partners, Y Combinator, and LetsVenture. While Venture Catalysts, Y Combinator, and BeeNext led the seed investments, Peak XV Partners, Sorin, and Quona were prominent investors in early-stage investments and Epiq Capital Advisors, UC-RNT Fund, and Amara Partners led the late-stage deals.