Bengaluru— India secured the third spot globally in fintech funding during the first quarter of 2025, trailing only the United States and the United Kingdom, according to a report released Tuesday by Tracxn, a leading market intelligence platform.
A significant portion of the funding occurred in late-stage investment rounds, which saw a 47% increase, reaching $227 million in Q1 2025 compared to $154 million in Q4 2024.
Total funding for the quarter stood at $366 million, with March emerging as the most active month, attracting $187 million—accounting for 51% of the quarterly total.
The Indian economy faced several headwinds, including bearish trends in the stock market, tariffs imposed by the U.S., global trade tensions, and rising inflation—all of which have dampened venture capital inflows.
Despite these challenges, India’s GDP growth for FY 2025 is projected to remain robust at approximately 6.5%.
Additionally, the growing international adoption of UPI (Unified Payments Interface) in countries such as Singapore, Nepal, and Sri Lanka presents a promising opportunity for Indian fintech companies to expand globally and attract further investment.
The fintech sector witnessed strong growth in key areas such as banking technology, internet-first insurance platforms, and investment tech—marking them as top-performing segments in Q1 2025.
Banking tech led the funding chart, securing $108 million—a 9% increase over the $99 million raised in Q1 2024 and a dramatic 1,700% jump from the $6 million recorded in Q4 2024. This segment accounted for 29.59% of the total fintech funding in the quarter.
Neha Singh, Co-founder of Tracxn, said, “The Indian fintech sector continues to evolve despite market fluctuations. While overall funding levels have declined, the industry’s long-term growth potential remains strong.”
“With increasing regulatory clarity, expansion of digital payments, and a growing global presence, we anticipate exciting opportunities for fintech startups in the years ahead,” she added.
The quarter also saw a total of 10 acquisitions, representing a 67% increase over Q1 2024 (6 acquisitions) and a 100% increase over Q4 2024 (5 acquisitions).
Bengaluru led the nation in fintech funding during Q1 2025, followed closely by Gurugram and Mumbai, the report noted. (Source: IANS)
