India's fintech sector ranks 3rd globally in H1 2025 funding round: Tracxn

Bengaluru-led funding activity in India with overall startups raising $889 million, down 26% from H2 2024, shows Tracxn fintech report

India’s FinTech sector raised $889 mn in H1 2025, ranking third globally despite a 26% drop from H2 2024. | Representative image

India’s financial technology sector has ranked third in startup funding in the first half of 2025, even as overall capital inflows moderated. According to Tracxn’s Geo Semi-Annual India FinTech Report H1 2025, Indian FinTech startups raised $889 million between January and June, behind only the United States and the United Kingdom.

At $889 million, the funding figure marks a 26 per cent decline from the $1.2 billion secured in the second half of 2024 and a 5 per cent dip compared to the same period last year. However, early-stage funding climbed 10 per cent from H2 2024 to reach $361 million and a 9 per cent increase compared to H1 last year. In contrast, seed-stage investments slumped to $91.2 million, down 27 per cent from the previous half-year period.

“While the Indian FinTech sector has seen a temporary dip in funding, the steady momentum in early-stage investments and growing acquisition activity indicate that investor interest remains strong, particularly in scalable, innovation-led models,” said Tracxn Co-founder Neha Singh.

M&A activity grows, fintech adds one new unicorn

India’s fintech sector also witnessed more mergers and acquisitions (M&A) activity in the first half of the calendar year. The report recorded 16 M&A deals in H1 2025, up 45 per cent from the same period a year ago. Key transactions included Groww’s $150 million acquisition of Fisdom and InCred Money’s $35 million deal to buy Stocko.

Despite the activity, no Fintech IPOs were recorded in H1 2025; however, one new unicorn did emerge during this period. One unicorn had emerged in H2 2024, while none had emerged in H1 2024.

Bengaluru leads funding, Accel secures most deals

Bengaluru remained the hub of FinTech innovation, drawing 55 per cent of the country’s total funding, followed by Mumbai with 14 per cent.

Peak XV, Angel List, and LetsVenture were among the most active investors overall. In early-stage rounds, Accel, Bessemer Venture Partners, and Peak XV led activity, while Blume Ventures, Venture Catalysts, and 100Unicorns dominated seed-stage funding. SoftBank Vision Fund, Lathe Investment, and Sofina topped the late-stage investment charts.

US-based Accel led with 34 deals, while Blume Ventures expanded its domestic footprint with investments in seven new startups.

RBI urges responsible fintech innovation

In March, the Reserve Bank of India (RBI) called on fintech firms and digital payment companies to pursue “responsible innovation” while conforming to regulatory standards. RBI Governor Sanjay Malhotra’s meeting with leaders from the fintech and non-bank payments sector signalled a notable shift in tone, following a period of crackdowns on non-compliant firms under the former governor’s tenure.

In a sign of regulatory easing, the RBI also reversed some of its previous measures, such as lifting additional risk-weight requirements for bank loans to top-rated non-banking financial companies.

Published – July 04, 2025

Source : https://www.business-standard.com/

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