According to Tracxn Geo Quarterly Report by market intelligence platform Tracxn, in first quarter (Q1) of Calendar Year (CY) 2024 (Q1CY2024), Indian fintech startups raised USD 550.8 million across 33 deals, marking a 59% increase from Q4 of 2023’s USD 346.7 million raised in 53 deals.
- Despite this surge, funding declined on a year-on-year (Y-o-Y) basis by 57% compared to Q1 of 2023’s USD 1.3 billion.
- India ranked 3rd globally in fintech funding, behind the United States (US) and China.
Highlights:
i.Alternative lending, RegTech (Regulatory Technology), and Banking Tech were the top-performing segments in Q1 2024, with alternative lending dominating funding with USD 491 million.
- RegTech, the second-highest funded sector, received funding of USD 107 million
- Banking Tech, the third-highest funded sector, received funding of USD 85.8 million.
ii.Bengaluru, Karnataka led fintech funding in Q1 2024, followed by Mumbai, Maharashtra and Hyderabad, Telangana showcasing their importance as fintech hubs.
Key Points:
i.Seed-stage fintech funding dropped by 75% to USD 9.9 million in Q1 2024 from USD 39.2 million in Q4 2023.
ii.Early-stage fintech startups raised USD 147 million in Q1 2024, a 35% drop from USD 227 million raised in Q4 2023.
iii.Late-stage funding surged to USD 394 million in Q1 2024 from USD 80.1 million in Q4 2023, but it still represents a 60% drop from USD 986 million in Q12023.
iv.Only two funding rounds in Q1 2024 exceeded USD 100 million, compared to four rounds in Q1 2023.
v.Peak XV Partners, Y Combinator, and LetsVenture are prominent investors.
- Saison Capital, Hem Angels, and Capital A led seed investments in Q12024.
- Peak XV Partners, RTP Global, and Asha were notable in early-stage investments
- Elev8, Epiq Capital Advisors, and UC-RNT Fund were active in late-stage investments in Q1 2024.
vi.Notable investments include Credit Saison and Avanse Financial raising significant funds, and Perfios becoming a unicorn with a valuation exceeding USD 1 billion.
Top fintech funding rounds in Q12024
| Company | Funding Amount USD/mn) |
|---|---|
| Credit Saison | 144 |
| Avanse | 120 |
| Perfios | 80 |
| Vivifi India Finance | 75 |
| Idfy | 27 |
City-wise Fintech Funding Trends in Q1CY2024
| Top 5 cities | Funding Percentage |
|---|---|
| Bengaluru, Karnataka | 44% |
| Mumbai, Maharashtra | 35% |
| Hyderabad, Telangana | 13% |
| Gurugram, Haryana | 3% |
| Noida, Uttar Pradesh (UP) | 2% |
Recent Related News:
i.According to the CRISIL (formerly Credit Rating Information Services of India Limited) report titled “Indian Economy: Capital as Growth Driver”, the Indian economy is expected to grow at an average rate of 6.7% per year between fiscals 2024 and 2031. This is slightly higher than the pre-pandemic decadal average of 6.6%.
ii.The Organization for Economic Co-operation and Development (OECD) Economic Outlook, Interim Report February 2024 titled “Strengthening the Foundations for Growth” has raised India’s Gross Domestic Product (GDP) growth forecast for FY 2024-25 to 6.2%, up from the November 2023 estimate of 6.1%.
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Chairperson and Managing Director– Neha Singh
Headquarters– Bengaluru, Karnataka
