Emerging from a prolonged funding winter, India’s startup ecosystem, particularly fintech, is showing clear signs of recovery. The first half of 2025 (H1 2025) marked a notable resurgence in investor confidence, with funding into fintech startups reaching $1.6 billion, up 60% from $1 billion in H1 2024, according to Inc42’s State Of Indian Fintech Report H1 2025.
The uptick in capital inflow signals a shift in investment sentiment, as founders move away from a “growth-at-all-cost” mindset and focus on building sustainable business models. This strategic pivot has found favour with investors, who are now backing ventures with strong fundamentals and clear paths to profitability.
The fintech sector, known for its resilience, stood out with not just improved funding but also higher ticket sizes. Median investment size jumped over 46% year-on-year to $7.3 million in H1 2025, underlining investors’ preference for established business models. While deal volume declined 16% year-on-year to 70, and 10% sequentially from H2 2024, the funding quantum remained robust—marking the second-highest half-year total since 2022.
Growth-stage startups drove much of this momentum. Funding for this segment surged 225% year-on-year to $742 million in H1 2025, with deal count climbing to 32 from 21 in both H1 and H2 2024. Late-stage startups attracted $778 million, up 13% year-on-year and a massive 685% sequentially, buoyed by two mega deals: Zolve’s $251 million raise and Groww’s $202 million round.
However, seed and early-stage startups faced headwinds. Seed-stage funding fell 21% to $59 million and deal count dropped 38%. Early-stage deals also slowed, with funding down nearly 33% from H2 2024.
The consolidation trend also gained traction. The fintech space recorded 10 mergers and acquisitions in H1 2025—equal to levels last seen in H2 2022—with Fullerton’s acquisition of Lendingkart drawing significant attention.
Geographically, Bengaluru retained its crown as India’s fintech capital, with startups in the city raising $10 billion of the $32 billion secured by Indian fintechs since 2014. Delhi NCR and Mumbai followed, securing $5.3 billion and $3.4 billion respectively.
Overall, H1 2025 underscores a more disciplined yet optimistic investment climate in India’s fintech sector, with emphasis shifting towards scale, sustainability, and value creation.
