In 2024, India solidified its position as a global leader in the fintech industry, ranking third in terms of funding received. However, the sector faced a significant setback, experiencing a 33% decline in total funding compared to the previous year, according to a recent report by market intelligence firm Tracxn. India raised USD 1.9 billion in fintech funding in 2024, down from USD 2.8 billion in 2023, despite the sector's steady growth over the past few years.
The fintech industry in India was not immune to the broader challenges affecting the global economy. These included reduced demand, ongoing geopolitical tensions, and economic uncertainties. Tracxn's Annual India Fintech Report 2024 notes, "The fintech sector experienced a notable decline in funding in 2024, with a total of USD 1.9 billion raised. This represents a 33% decrease from the USD 2.8 billion secured in 2023. The Indian fintech ecosystem has solidified its position as one of the top three globally funded fintech ecosystems in 2024, trailing only the US and the UK."
The sector had reached USD 5.6 billion in 2022, showing a notable reduction in funding across the past two years, despite being a global leader in fintech funding.
The third quarter of 2024 proved to be the most successful for India’s fintech industry, securing USD 805 million — a remarkable 61% increase compared to the same period in 2023. The latter half of the year also contributed significantly, with 59% of the total funding raised in 2024 coming in the second half, signaling a recovery toward the year’s close. August was the standout month, contributing USD 434 million, marking it as the peak of fintech investment in India for 2024.
Despite the overall funding slowdown, India’s fintech sector continues to show remarkable resilience. Two new fintech unicorns — Money View and Perfios — emerged in 2024, a major achievement compared to just one unicorn in 2023.
This growth indicates the sector's ability to withstand challenges. "Despite the global funding slowdown, India's fintech ecosystem continues to demonstrate remarkable resilience and adaptability. The emergence of two new unicorns and a record eight IPOs in 2024 underscore the sector's ability to thrive amidst challenges," said Neha Singh, Co-Founder of Tracxn.
The record eight Initial Public Offerings (IPOs) in 2024 represent a 300% increase from the two IPOs in 2023, showcasing investor confidence and a growing market presence for fintech companies.
Digital lending remained the dominant segment in India’s fintech space, accounting for 64% of the total funding raised in 2024. Notable funding rounds in the digital lending space included DMI Finance securing USD 334 million, led by MUFG, and Credit Saison raising USD 144 million.
However, late-stage funding was most affected, seeing a sharp decline of 42%, falling from USD 1.9 billion in 2023 to just USD 1.1 billion in 2024. Early-stage and seed-stage funding also saw reductions, with early-stage rounds dipping by 16%, and seed-stage funding dropping by 19% compared to the previous year.
Mergers and acquisitions saw a slight decline in 2024, with 26 deals recorded — down 16% from 31 in 2023. Some of the prominent transactions included the acquisition of PureSoftware by Happiest Minds for USD 94.5 million, and ET Money being acquired by 360 One for USD 44 million.
Bengaluru continued to hold the crown as the top hub for fintech funding in 2024, followed by Mumbai and Delhi. Investors such as Peak XV Partners, LetsVenture, and Y Combinator dominated the fintech investment landscape in India, with early-stage funding primarily driven by firms like Venture Catalysts and Elevation Capital.
The Investment Tech sector saw a slight decline, with funding dropping by 11%, from USD 358 million in 2023 to USD 320 million in 2024. The Payments segment, however, experienced a significant downturn, with funding falling 77% from USD 836 million in 2023 to just USD 194 million in 2024.
Despite these challenges, India’s fintech industry is expected to continue its growth trajectory. As Neha Singh, Co-Founder of Tracxn, stated, “As we look to the future, the sector is poised to build on these successes, driving financial inclusion and innovation while solidifying its position as a global leader in the fintech space.”
India’s fintech industry, despite facing a decline in funding in 2024, continues to demonstrate strong resilience and adaptability. With the emergence of new unicorns, record IPOs, and significant investments in digital lending, India remains a top player in the global fintech ecosystem. As the sector navigates through challenges, its ability to innovate, attract investments, and drive financial inclusion will ensure its continued growth and relevance in the coming years.