Indian FinTech startups raise $1.2 billion in first quarter of 2023: report

The sector recorded late-stage investments of $977 million in the first three months of 2023, a spike of 325% when compared to Q4 2022 but a drop of 44% from Q1 2022

April 13, 2023 02:07 pm | Updated 02:07 pm IST - CHENNAI

FinTech startups in the country attracted investments worth $1.2 billion in during the first quarter of 2023, 55% lower than $2.6 billion raised in the first quarter of 2022. However, this is a sharp jump of 126% when compared with $523 million raised in the fourth quarter of 2022, according to details provided by Tracxn, a SaaS-based market intelligence platform.

Tracxn, in its Geo Quarterly FinTech India Report - Q1 2023, said that in the FinTech space India is the second-highest funded geography after the U.S. in Q1 2023, and occupies a spot in the top five geographies in terms of total funding activities. However, the funding is still on a declining trend when compared with previous years, although there has been an uptick in funding over the past few quarters. The sector recorded late-stage investments of $977 million in the first three months of 2023, a spike of 325% when compared to Q4 2022 but a drop of 44% from Q1 2022. Early-stage funding during the quarter was $177 million, down 30% and 76% from Q4 2022 and Q1 2022 respectively. Seed-stage funding of $30.2 million was observed during this quarter, a fall of 21% and 74% from Q4 2022 and Q1 2022 respectively.

Sequoia Capital, AngelList and Y Combinator are the most active investors in India’s FinTech space. Y Combinator, LetsVenture, and Premji Invest were the top investors in Q1 2023. Y Combinator, 100X.VC and LetsVenture were the top seed-stage investors. Xceedance, Telama Family Office, and CourtsideVC were the top early-stage investors, while Premji Invest, General Atlantic, and TVS Capital Funds were the top late-stage investors.

The FinTech sector observed six $100 million funding rounds in the first three months of 2023. Companies such as PhonePe, Mintify, Insurance Dekho and KreditBee raised funds above $100 million during this period.

According to the report, it was an uneventful quarter in terms of IPOs and Unicorns. No companies from the FinTech space went public in Q1 2023, and there were no new entrants in the Unicorn club. However, there was a slight uptick in acquisitions. The sector witnessed 11 acquisitions in Q1 2023, as against six acquisitions in Q4 of 2022. 

Among Indian cities, FinTech companies in Bengaluru takes the lead, raising $796 million in the first quarter of 2023. This was followed by Mumbai and Gurugram, which raised $222 million and $151 million respectively, during the quarter.

India continues to be an attractive market for FinTech investors for several reasons. Digital payment solutions have received widespread acceptance within the country.

According to numbers released by the Reserve Bank of India (RBI), 128 million retail digital payment transactions worth $600 billion were processed in January 2023 alone. Some new regulations introduced in the country, such as restriction on access to user data, among others, will help in promoting the safety and privacy of users. Further, the government’s push to promote a cashless economy combined with rising internet penetration in both rural and urban areas has contributed substantially in developing this sector within the country.

Top News Today

Sign in to unlock member-only benefits!
  • Access 10 free stories every month
  • Save stories to read later
  • Access to comment on every story
  • Sign-up/manage your newsletter subscriptions with a single click
  • Get notified by email for early access to discounts & offers on our products
Sign in


Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.