A recent report by Tracxn highlights significant developments in the Indian fintech sector during the third quarter of the calendar year. Fintech companies in India managed to secure a substantial funding amount of US$436 million, marking a remarkable 68% surge from the US$259 million raised in the preceding quarter.
However, a year-on-year comparison reveals a contrasting picture, with funding declining by 55% from the US$967 million raised in Q3CY22. This decline in overall funding is partially offset by a notable increase in late-stage funding rounds.
Late-stage rounds witnessed an impressive growth of 141%, accumulating US$326 million in Q3CY23, up from US$135 million in the previous quarter. Yet, when measured against the US$471 million achieved in Q3CY22, there’s a 31% year-on-year decrease in these rounds. Furthermore, the total number of funding rounds experienced a significant decline of 78.6% year on year, decreasing from 103 in Q3CY22 to just 22 in Q3CY23. For context, Q2CY23 saw 35 funding rounds.
The distribution of funding rounds in Q3CY23 consisted of 11 seed rounds, seven early-stage rounds, and four late-stage rounds. Interestingly, this quarter saw the occurrence of two initial public offerings (IPOs) by Zaggle and Veefin, compared to just one IPO in the same period the previous year.
Neha Singh, Co-Founder at Tracxn, commented on these findings, stating, “In a time of global economic uncertainty, India’s FinTech sector has demonstrated exceptional resilience and growth. Tracxn’s Q3 2023 report sheds light on a pivotal period where our FinTech startups exhibited a remarkable 68% increase in funding compared to Q2 2023. This increase demonstrates the sector’s vitality and creativity, establishing India as a prominent global player in FinTech.”
