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Business News/ Companies / Start-ups/  FinTech startup funding drops 57% between Jan-March this year amid Paytm crisis
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FinTech startup funding drops 57% between Jan-March this year amid Paytm crisis

Fintech startups in India raised $551 million in Q1 2024, a 57% decrease from the previous year. 'Alternative Lending' received $491 million, Credit Saison topped with $144 million. Bengaluru, Mumbai, and Hyderabad were the top cities for investment.

Investors pumped in $247 million in Bengaluru-based Fintech companies in Q1 2024Premium
Investors pumped in $247 million in Bengaluru-based Fintech companies in Q1 2024

India's fledgling fintech companies witnessed a 57% drop in funding in Q1 2024 amid Paytm fiasco. According to a report by market intelligence platform Tracxn, the domestic FinTech startups raised a total of $551 million of funds between January and March 2024 as compared to $1.3 billion raised in the same period in 2023.

The seed-stage funding to FinTech startups stood at $9.9 million, early-stage fundings were $147 million and late-stage fundings were recorded at $80.1 million in Q1 2024.

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Among the FinTech sector, the 'Alternative Lending' segment accounted for almost 89% of the total funding in the first three months of 2024. The 'Alternative Lending' firms clocked $491 million during this period, Tracxn mentioned.

Credit Saison emerged as the top-funded company in the 'Alternative Lending' segment, receiving $144 million in a Series D round in Q1 2024. RegTech segment secured $107 million of funding, and Banking Tech received $85.8 million in the same period. Perfios, a RegTech firm raised $80 million from Teachers' Venture Growth and entered the unicorn club (Valuation above $1 billion).

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Tracxn report mentioned that India bagged the third rank in terms of funding raised for the FinTech sector in the first quarter of the current calendar year.

"Our Q1 2024 findings emphasize the sector’s innovative capabilities and its potential to drive India's economic expansion. The sustained investor interest emphasizes the importance of nurturing startups and R&D, aligning with the Startup India Initiative," Neha Singh, Co-Founder of Tracxn told Mint.

Among Indian cities, investors pumped in $247 million in Bengaluru-based Fintech companies in Q1 this year, followed by Mumbai ($194 million) and Hyderabad ($75 million), respectively.

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Peak XV Partners, Y Combinator, and LetsVenture were the all-time top investors in the space.

The quarter also saw four acquisitions in the FinTech space of which the notable was Difenz acquiring Signzy for $5 million. The other acquisitions were Cred acquired Kuvera, Just Pay acquired LotusPay and DMI Finance acquired ZestMoney. However, the size of the three deals remains undisclosed.

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ABOUT THE AUTHOR
Mansi Jaswal
I write about gender-related issues, women's rights, women empowerment, gender equality, women's health topics, and their wealth management. Also, profiling women who have fought all odds to make their own identities in their own rights. Before Mint, I worked at Business Today and Business Standard. I studied journalism at IIMC, Delhi. Got a story idea? Email me at mansi.jaswal@htdigital.in
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Published: 12 Apr 2024, 12:49 PM IST
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