In October 2024, India’s fintech sector witnessed a substantial decline in funding, with total investments dropping to $199.4 million across just four rounds. This marks a sharp decrease from the previous months, with $507.8 million raised in August and $230 million in September, continuing a downward trend. However, the October funding still remains almost double compared to the same month in 2023, when Indian fintech companies raised $108 million from 12 deals.
This reduction in funding reflects a broader global trend of investor caution, adding to the sector’s recent volatility. Throughout 2024, the fintech funding environment has been fluctuating. After a strong June, which saw $587.4 million raised, there were dips in May ($186.2 million), July ($139 million), and a moderate rise in August. The funding slowdown is a significant shift from the more robust levels witnessed in the past two years. As per Tracxn data, India ranked third globally in fintech funding in 2023, yet saw a 63% drop in investments, totaling $2 billion, down from $5.4 billion in 2022 and $8.4 billion in 2021.
Among the notable rounds in October 2024, Finova Capital raised $135 million in Series E funding from Avataar Venture Partners, Sofina, Madison India Capital, and Norwest Venture Partners. Other significant deals included Vridhi Home Finance’s $36.9 million Series B funding from Norwest Venture Partners and Elevation Capital, Zinc Money’s $25.5 million seed funding round led by Nexus Venture Partners, Quona Capital, EDBI, Global Ventures, and Credit Saison, and Febi.ai’s $2 million pre-Series A funding from Lumis Partners.
Despite this decline, India’s fintech sector saw a notable increase in late-stage funding, which totaled $582 million in Q3 2024, a 97% increase from Q3 2023. Tracxn reports that Indian fintechs raised $778 million in Q3 2024, a 66% year-on-year increase, ranking second globally. Peak XV and Y Combinator emerged as the leading investors during this period.
The broader trend highlights the challenges faced by the sector, with India’s fintech funding slowing down to $2.37 billion by June 2024, compared to $2.98 billion raised in 2023. With a challenging investment climate, the future of Indian fintech funding remains uncertain but continues to show resilience amid fluctuating market conditions.
