Fintech start-ups in India attracted investments worth $1.2 billion in Q1 2023: 55 per cent lower than the $2.6 billion raised in Q1 2022, according to Tracxn.
However, this is a sharp jump of 126 per cent compared with $523 million raised in Q4 of 2022. In the fintech space, India is the second-highest funded geography after the US in Q1 2023 and occupies a spot in the top five geographies in terms of total funding activities.
The fintech sector recorded late-stage investments of $977 million in the first three months of 2023, a spike of 325 per cent when compared to Q4 2022 but a drop of 44 per cent from Q1 2022. Early-stage funding during the quarter was $177 million, down 30 per cent and 76 per cent from Q4 2022 and Q1 2022 respectively.
Also read: Start-up funding dips 75% to $2.8 billion in Q1 2023: Report
Seed-stage funding of $30.2 million was observed during this quarter, a fall of 21 per cent and 74 per cent 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. Further, Xceedance, Telama Family Office, and CourtsideVC were the top early-stage investors, whereas Premji Invest, General Atlantic, and TVS Capital Funds were the top late-stage investors in the sector.
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. The sector witnessed 11 acquisitions in Q1 2023, against six acquisitions in Q4 of 2022.
Also read: India’s fintech sector can buck global headwinds
Among Indian cities, fintech companies in Bengaluru take 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.