India Becomes 3rd Highest-Funded Fintech Startup Ecosystem in Q1 2025
India rose to become the third highest-funded fintech startup ecosystem in the world during the first quarter of 2025, based on figures provided by market intelligence platform Tracxn. Yet the industry experienced a steep slump in funding amid continuing macroeconomic issues and geopolitical tensions.
Cumulative fintech financing was at $366 million for Q1 2025, down by 35% compared to $571 million in fundraising for the period last year. The figures were close to parity with Q4 2024, when the total financing reached $365 million.
Early-stage investments saw a major decline, with just $92.6 million raised in Q1 2025 a 56% drop year-on-year and a 41% fall from the previous quarter. Seed-stage funding also fell by 39% year-on-year to $45.9 million, and by 16% compared to Q4 2024.
In spite of the decline, Neha Singh, Tracxn Co-Founder, is upbeat: "Although funding levels have dropped, the sector's long-term growth prospects are robust. Regulatory clarity, expansion of digital payments, and international reach will propel future opportunities in the sector".
March alone added $187 million 51% of the quarter's total showing renewed momentum at the end of the quarter.
Banking Tech was the best-funded segment with $108 million an increase of 9% from Q1 2024. Bengaluru-headquartered Zolve, a cross-border neo-banking platform, raised $51 million in Series B funding, accounting for nearly half of the segment's capital.
Internet First Insurance Platforms attracted $87 million in Q1 2025, a stunning 1,391% rise from $5.84 million in Q1 2024, with no funding noted in Q4 2024.
The quarter had no new unicorns or IPOs, compared with one unicorn and one IPO in the comparable quarter last year.
At the city level, Bengaluru was the leader in fintech funding, followed by Gurugram and Mumbai, and continued to power India's fintech story of innovation.
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