Tracxn’s 2022 Fintech India Report: Funding Drops 47% from the Previous Year

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Tracxn's Fintech India Report 2022

– In 2022, Indian fintech startups received a total funding of $5.65 billion, which is a 47% decrease from the previous year.
– India remains the third-highest country in terms of funding for fintech, behind the United States and the United Kingdom.
– Among all sectors, fintech was the second-highest funded in India for the year 2022, with enterprise applications being the highest.
– There was a 50% decrease in funding rounds worth $100 million or more, going from 26 in 2021 to 13 in 2022.

Jan 19, 2023: Tracxn, a leading global SaaS-based market intelligence platform, has released its Fintech India Report for 2022. The report, based on Tracxn’s extensive database, provides in-depth insights into the current state of India’s fintech industry.

According to the report, fintech startups in India raised a total of $5.65 billion in 390 rounds in 2022, a decrease of 47% in terms of funding amount and 29% in the number of rounds when compared to 2021. Despite this decline in funding, India remains the third-highest funded country in the fintech sector, behind only the United States and the United Kingdom.

The report attributed the drop in funding to a decline in late-stage funding, which fell from $8.3 billion in 2021 to $3.7 billion in 2022, a decrease of 56%. The report also noted that India is currently experiencing a “funding winter,” with growing inflation and macroeconomic tensions causing investors to be more cautious in making large investment decisions.

Despite this, fintech remains a key sector in the Indian startup ecosystem and has consistently been one of the top-funded sectors. In 2022, fintech was the second-highest funded sector, behind only enterprise applications. The report notes that the shift towards digitization, accelerated by the COVID-19 pandemic, has led to a significant increase in the adoption of fintech solutions. Digital payments and lending, previously concentrated in major cities, are now becoming mainstream in Tier II and III cities across the country.

The report also noted that the number of funding rounds of $100 million or more fell by 50%, from 26 rounds in 2021 to 13 rounds in 2022. Y Combinator, Tiger Global Management, and Lets Venture were the most active investors in the space, with more than 20 investments each in 2022. Only 4 startups in India’s fintech sector received “unicorn” status in 2022, compared to 13 new unicorns in 2021.

In terms of location, the report found that fintech companies in the Delhi-NCR region (Delhi, Noida, and Gurgaon) have raised a combined funding of $14.9 billion to date, followed by Bengaluru ($10.2 billion) and Mumbai ($4.2 billion). Overall, the report suggests that while funding for fintech startups in India has decreased in 2022, the sector is expected to continue growing in the long run due to factors such as a large unbanked population and rising mobile phone usage.

Click here to view Tracxn’s Fintech India Report 2022.