In 2023, the Fintech sector in India saw a funding decline of 63% and 76% compared to 2022 and 2021, respectively, amounting to $2 billion, as reported by Tracxn. Despite challenges like rising borrowing costs and macroeconomic conditions, India maintained its global standing by ranking 3rd in fintech startup funding.
Late-stage rounds secured $1.4 billion, witnessing a significant 56% decrease from the $3.2 billion raised in 2022. Early-stage rounds and seed-stage rounds followed suit, experiencing drops of 73% ($489 million) and 69% ($145 million), respectively. Notable investors included Peak XV Partners, Y Combinator, and LetsVenture.
India excelled in digital payments, surpassing the combined transactions of the top four countries. In 2022, India recorded 89.5 million transactions, and experts predict a staggering $100 trillion by 2030 in the payments landscape.
Fintech Watch is now on WhatsApp Channels. Subscribe today by clicking the link and stay updated with the latest fintech insights!” Click here!
Top-performing segments in the fintech sector were Alternative Lending, Payments, and Banking Tech. Alternative Lending received $835 million in funding in 2023, down from $2.28 billion in 2022. The BNPL segment experienced growth due to increased adoption. The digital lending space, anticipating growth with the Digital Personal Data Protection Act, is set to enhance transparency and customer trust.
Banking Tech secured $331 million in 2023, marking a 50% drop from the $671 million in the previous year. The sector thrived on digitalization, propelled by increased internet usage and mobile accessibility. The government’s commitment to the $16.7 billion BharatNet project for enhanced rural broadband connectivity is anticipated to extend the sector’s reach and attract more investments.