Indian fintech funding hits $1.9B in 2024; Bengaluru leads investments

Indian fintech startups secured $1.9 billion in funding in 2024, marking a 33% decline from $2.8 billion in the year before, according to Tracxn's annual Fintech Report.

Despite the decline, India retained its position as the third-largest fintech funding hub globally, trailing only the US and the UK.

In 2022, Indian fintech startups had raised a whopping $5.6 billion.

The third quarter of 2024 emerged as a bright spot, with $805 million raised, accounting for 42% of the year’s total. August was the most robust month, contributing $434 million to the annual total. However, only three funding rounds exceeded $100 million, half of the six recorded in 2023.

Among the major deals, DMI Finance led the pack with a $334 million Series E round backed by MUFG. Credit Saison, an online lending marketplace, followed with $144 million in Series D funding.

Digital lending dominated the scene, representing 64% of total funding and driving financial inclusion in both urban and rural areas. Alternative lending came next, attracting $1.21 billion, reflecting only a modest 4% dip from 2023.

Meanwhile, investment tech raised $320 million, an 11% drop from the previous year, while payments suffered a dramatic decline, securing just $194 million compared to $836 million in 2023.

Among investors, Peak XV Partners, LetsVenture, and Y Combinator emerged as top contributors, with Elevation Capital, GMO Venture Partners, and Peak XV leading early-stage funding.

Late-stage investments saw leaders like Creaegis, The Rise Fund, and Amara Partners.

Bengaluru remained the epicenter of fintech activity, followed by Mumbai and Delhi. Bengaluru-based fintechs raised $524 million, representing 41% of the total while the financial capital Mumbai secured $440 million, benefiting from its established presence in banking and financial services.

Fintech startups in the Delhi-NCR raised $547.5 million, primarily driven by digital lending and payment solution companies. Other cities, including Pune and Hyderabad, collectively garnered $352.9 million.