India Ranks as the Fourth-Highest Funded Fintech Startup Ecosystem

According to a survey released on Thursday, India became the fourth-highest financed fintech startup ecosystem globally thanks to a 68% increase in funding for the country’s fintech sector between the months of July and September (Q3) compared to the prior quarter.

With around 1 lakh firms, the nation ranks third internationally in terms of startup ecosystem size, behind the US and China.

There were no new unicorns in Q3, however there were 7 acquisitions and 2 IPOs. In the fintech sector, Bengaluru received the most money, followed by Mumbai and Noida, according to a report by Tracxn, a top market information platform.

The top financiers in the fintech industry have been identified as Peak XV Partners, Y Combinator, and Accel.

Specific industry segments had tremendous growth, with alternative lending, banking technology, and regulatory technology emerging as the top achievers in the first half of this year.

Particularly, Alternative Lending had an impressive increase of 259% compared to Q2 2023, hitting $305 million in funding.

The sector’s expansion was aided by the BNPL (buy now, pay later) market, which has witnessed tremendous growth and adoption throughout the nation.

“In a time of economic unrest around the world, India’s fintech sector has demonstrated incredible resilience and growth,” said Neha Singh, co-founder of Tracxn.

This increase highlights the industry’s ingenuity and dynamism, placing India as a major player in the global fintech market, she continued.

In Q3 2023, Banking Tech got $282 million in financing, an increase of 396 percent over Q2 and 81 percent over Q3 2022.

RegTech (regulatory technology) got $229 million in funding in Q3, an increase of 100% from the previous quarter.

Platforms for payments, embedded finance, and Internet-first insurance all had declines of 91%, 99%, and 64%, respectively.

In the third quarter of 2023, a stunning $229 million was raised in a series D round led by Kedaara Capital for Perfios, a real-time credit-decisioning platform.

Seven purchases were made during the quarter, which is a minor decrease of 12% from the eight made in Q3 2022.