Tracxn, a market intelligence platform, has unveiled its Geo Quarterly India FinTech Report, Q1 2024. As per the report, India secured the third position globally in terms of funding raised for the FinTech sector in Q1 2024.
Q1 2024 witnessed a total funding of $551 million, marking a notable increase of 59 per cent compared to the $346 million raised in the previous quarter (Q4 2023). However, it reflected a 57 per cent decline compared to the $1.3 billion raised in Q1 2023.
Q1 2024 witnessed a significant 75 per cent drop in seed-stage funding, which was at $9.9 million compared to $39.2 million in the previous quarter. Early-stage funding saw a 35 per cent drop from $227 million raised in Q4 2023 to $147 million in Q1 2024. Only late-stage funding rounds witnessed a phenomenal rise of 392 per cent to $394 million, compared to $80.1 million in Q4 2023.
The report highlights that the sector witnessed significant growth in specific segments, with Alternative Lending, RegTech, and Banking Tech emerging as top performers in Q1 2024. Alternative lending accounted for almost 89 per cent of the total funding, clocking a remarkable growth of 290 per cent compared to the $126 million raised in Q4-2023, reaching $491 million in funding.
RegTech, the second-highest funded sector, received funding of $107 million. Banking Tech, the third-highest funded sector, received funding of $85.8 million in Q1 2024, which is a growth of 187 per cent compared to the $29.9 million in funding witnessed in Q4 2023, benefiting substantially from record-breaking UPI transactions and digital banking’s widespread adoption due to rising internet and mobile device penetration in cities and rural areas.
Neha Singh, Co-Founder of Tracxn, said, "Our Q1 2024 findings emphasise the sector’s innovative capabilities and its potential to drive India's economic expansion. The sustained investor interest emphasises the importance of nurturing startups and R&D, aligning with the Startup India Initiative.”
The quarter saw four acquisitions, a 43 per cent drop from seven acquisitions in Q4 2023. A notable acquisition was Difenz, a fraud risk management platform that was acquired by Signzy for $5 million. Two companies, Medi Assist and IBL Finance, went public in Q1 2024, showcasing the growing maturity of the Indian FinTech ecosystem.
Bengaluru emerged as the leader in total fintech funding raised during Q1 2024, followed closely by Mumbai and Hyderabad, reaffirming the significance of these cities as fintech hubs in India's startup landscape.
Peak XV Partners, Y Combinator, and LetsVenture are the all-time top investors in the space. Saison Capital, Hem Angels, and Capital A led the seed investments in Q1 2024, while Peak XV Partners, RTP Global, and Asha were prominent in early-stage investments. Elev8, Epiq Capital Advisors, and UC-RNT Fund are the leading investors actively involved in late-stage Q1 2024.
