Fintech start-up funding drops 57% in Jan-March this 12 months: report

Funding for monetary expertise (fintech) start-ups declined by 57 per cent in Q1 2024, in comparison with Q1 2023, in response to a report by market intelligence platform Tracxn. Total funding in Q1 of the present calendar 12 months stood at $551 million, in comparison with $1.3 billion raised throughout the identical interval in FY23. Nevertheless, the funding elevated by 59 per cent in comparison with $346 million raised in This fall 2023.

The seed-stage and early-stage funding noticed a large decline. The seed-stage funding plummeted by 75 per cent to $9.9 million in comparison with $39.2 million within the earlier quarter, whereas the early-stage funding noticed a 35 per cent drop to $147 million in Q1 2024 from $227 million raised in This fall 2023. On a year-on-year foundation, the funding began to plunge.

Solely late-stage funding rounds witnessed an exceptional rise of 392 per cent to $394 million, in comparison with $80.1 million in This fall 2023, in response to Geo Quarterly India FinTech Report. India secured the third place globally when it comes to funding raised for the fintech sector in Q1 2024, per the report.

High performers and progress issue

The report highlights that the fintech sector witnessed important progress in particular segments, with different lending, regulatory expertise (regtech) and banking tech rising as prime performers in Q1 2024.

’Different Lending’ garnered virtually 89 per cent of the entire funding, clocking a progress of 290 per cent in comparison with $126 million raised in This fall 2023, reaching $491 million in funding.

Regtech, the second-highest funded sector, obtained funding of $107 million.

Banking tech, the third-highest funded sector, obtained $85.8 million in Q1 2024, which is a progress of 187 per cent in comparison with $29.9 million in funding witnessed in This fall 2023. This follows record-breaking UPI transactions and widespread adoption of digital banking with the rise of web and cell machine penetration in cities and rural areas.

Additionally learn: Indian start-up funding sees revival, VC investments double in Q1 2024

“We’re happy to watch India’s fintech sector’s resilience amidst world financial shifts. Our Q1 2024 findings emphasise the sector’s progressive capabilities and its potential to drive India’s financial enlargement. The sustained investor curiosity emphasises the significance of nurturing start-ups and R&D, aligning with the ‘Startup India’ initiative. This surge displays the trade’s dynamism and innovation, positioning India as a number one world fintech participant,” mentioned Neha Singh, Co-Founder, Tracxn.

The quarter noticed 4 acquisitions, a 43 per cent drop from seven acquisitions in This fall 2023. A notable acquisition was Difenz, a fraud danger administration platform that was acquired by Signzy for $5 million.

High buyers

Medi Help and IBL Finance went public in Q1 2024, showcasing the rising maturity of the Indian finech ecosystem.

Bengaluru emerged because the chief in whole fintech funding throughout Q1 2024, adopted carefully by Mumbai and Hyderabad.

Peak XV Companions, Y Combinator and LetsVenture are the “all-time” main buyers on this house. Saison Capital, Hem Angels and Capital A led the seed investments in Q1 2024, whereas Peak XV Companions, RTP International and Asha had been distinguished in early-stage investments. Elev8, Epiq Capital Advisors and UC-RNT Fund are the highest buyers actively concerned in late-stage in Q1 2024.