FinTech funding in India dropped by 63% in 2023: Report

In 2023, InCred emerged as the sole unicorn, undergoing 31 acquisitions and witnessing two IPOs. In 2023, India’s FinTech sector experienced a significant setback with a staggering 63% decline in funding, according to a report from data intelligence platform Tracxn. The sector, previously marked by robust growth, faced subdued investor sentiments amid a funding downturn. The total funding for FinTech in 2023 amounted to $2 billion, marking a substantial drop of 63% and 76% compared to the previous years of $5.4 billion in 2022 and $8.4 billion in 2021, respectively.

The challenging year reflected in India’s startup ecosystem, witnessing only five funding rounds surpassing $100 million. InCred stood out as the sole unicorn born in 2023, concurrently engaging in 31 acquisitions and witnessing two IPOs. Bengaluru took the lead in FinTech funding, followed by Mumbai and Jaipur.

Despite facing challenges such as increasing borrowing costs and macroeconomic conditions, India secured its position as a major global player in FinTech, ranking 3rd globally in 2023 for FinTech startup funding. India emerged as a digital payments leader in 2022, surpassing the combined transactions of the top four countries, recording 89.5 million transactions.

In specific FinTech segments, Alternative Lending experienced a funding decrease from $2.28 billion in 2022 to $835 million in 2023. However, the BNPL (Buy Now, Pay Later) sector saw notable growth, driven by widespread adoption within the country. The Digital Personal Data Protection Act is set to drive the expansion of digital lending, bolstering transparency and customer trust.

Banking Tech in 2023 received $331 million in funding, experiencing a 50% drop from the $671 million secured in 2022. Digitalization benefits the segment, gaining momentum with the government’s $16.7 billion BharatNet project, expanding broadband connectivity in rural areas and attracting investments.

Also Read : Japan earthquake death toll rises to 73