Fintech sector in India has witnessed a decline of 63% in funding in 2023 according to a report by Tracxn, as informed by Hindustan Times. The sector has received funding of $2 billion in 2023 compared to $5.4 billion in 2022 and $8.4 billion in 2021.
The report further informed that only five $100 million+ funding rounds took place in 2023. InCred was the only unicorn created in 2023, while the year saw 31 acquisitions and 2 initial public offerings (IPO). Bengaluru, followed by Mumbai and Jaipur funded the most for Indian fintech space.
Despite all the challenges faced by the fintech sector in India, as per the report, India ranked 3rd globally in 2023 in terms of fintech startup funding. “Despite a 63% decline, the sector stands strong as the third-highest funded ecosystem globally, affirming its position as a hub of innovation. The implementation of regulatory measures and the government’s commitment to digitalization have set the stage for a promising future,” said Neha Singh, co-founder at Tracxn, as quoted by Business Insider.
Alternative lending received funding of $835 million in 2023, witnessing a decrease from $2.28 billion in 2022. Banking tech received funding of $331 million in the year, addressing a fall of more than 50% from $671 million funding in 2022. The Buy Now Pay Later (BNPL) segment saw significant growth due to its adoption within the country, which contributed to the growth of the sector.
The Indian government has also recently allocated about $16.7 billion towards the BharatNet project to increase broadband connectivity within rural areas, which will help widen the reach and potentially attract more investments into the sector.
