Despite the challenges posed by factors including rising borrowing costs and macroeconomic conditions, among others, India has become one of the world’s most financed countries. According to a latest report by Tracxn, India ranked 3rd globally in 2023 in terms of FinTech startup funding, strengthening its position as a significant player on the global stage.
However, like all other sectors, funding in the FinTech space has also experienced a downward trend in India as well as globally. The FinTech sector received funding of USD 2 billion in 2023, a decrease of 63 percent and 76 percent compared to previous years – with USD 5.4 billion raised in 2022 and USD 8.4 billion in 2021, respectively, Tracxn’s India FinTech report highlighted. .
The FinTech funding landscape experienced a significant decline in 2023. Late-stage rounds in 2023 secured USD 1.4 billion in funding, reflecting a 56 percent drop compared to the USD 3.2 billion raised in 2022. Early-stage rounds faced a similar trend, with funding falling to USD 489 million, marking a steep 73 percent decrease from the USD 1.8 billion raised in 2022.
Seed-stage rounds were not immune to this downward trajectory either, securing USD 145 million, a 69 percent drop compared to the USD 474 million raised in the previous year, it added.
The year witnessed five funding rounds exceeding the USD 100 million mark, showing pockets of resilience in the sector. Notably, Perfios, a real-time credit decision platform, raised USD 229 million in a Series D round led by Kedaara Capital. Mintifi, an online marketplace for business loans, has secured USD 110 million in a Series D funding round led by Premji Invest, the report said.
Peak XV Partners, Y Combinator and LetsVenture were the main investors in the space. In this, We Founder Circle, Y Combinator, and 100X.VC led the seed investments; Accel, Omidyar Network India and Elevation were prominent early-stage investors, and OP Finnfund Global Impact Fund was the leading late-stage investor in 2023.
Additionally, two companies, Zaggle and Veefin, announced IPOs in 2023, compared to five companies that went public in 2022. There were also 31 acquisitions, similar to the previous year, with some of the notable ones being TrillionLoans acquired by BharatPe for USD 36. million, Goals101 acquired by M2P for USD 30 million; and up acquired by LendingKart for USD 12.1 million.
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