Indian fintech start-ups raised $1.9B in 2024, down 32% YoY
What's the story
Indian fintech start-ups raised a total of $1.9 billion in funding last year, according to Tracxn's annual Fintech Report.
This marks a 32.14% decline from the previous year's total of $2.8 billion.
Despite the decline, India retained its position as the third-largest global hub for fintech funding, behind the US and UK.
In 2022, Indian fintech firms had raised a whopping $5.6 billion.
Funding highlights
Q3 2024 was a bright spot for fintech funding
The third quarter of 2024 proved to be a landmark period for India's fintech funding, with start-ups raising $805 million. This constituted 42% of the total funding for the year.
August was the most successful month, adding $434 million to the annual tally.
However, only three funding rounds crossed the $100 million mark, down from six such occurrences in 2023.
Deal dominators
DMI Finance and Credit Saison led major deals
DMI Finance led the list of big deals in 2024 with a $334 million Series E round led by MUFG. Close behind was Credit Saison, an online lending marketplace that raised $144 million in Series D.
Digital lending continued to be the leading sector, contributing 64% of total funding and driving financial inclusion across urban and rural areas.
Alternative lending raised $1.21 billion, only a marginal 4% drop from 2023.
Sector shifts
Investment tech and payments sectors saw funding decline
The investment tech sector witnessed an 11% decline in funding from last year, raising $320 million.
The payments sector witnessed a sharper decline, with funding plummeting to a mere $194 million against $836 million in 2023.
Among investors, Peak XV Partners, LetsVenture, and Y Combinator emerged as the biggest contributors.
Elevation Capital, GMO Venture Partners, and Peak XV led early-stage funding while late-stage investments were dominated by Creaegis, The Rise Fund, and Amara Partners.
Regional leaders
Bengaluru leads as epicenter of fintech activity
Bengaluru remained the epicenter of India's fintech activity, with city-based start-ups raising $524 million or 41% of the total funding.
Mumbai, with its strong banking and financial services presence, followed with $440 million.
Delhi-NCR region's fintech firms raised $547.5 million, mostly led by digital lending and payment solution companies.
Other cities such as Pune and Hyderabad together raised $352.9 million.