Indian fintech start-ups raise $1.2 bn in Q1 2023

NEW DELHI: Fintech start-ups in the country attracted investments worth $1.2 billion in Q1 2023, 55 per cent lower (year-on-year) than $2.6 billion they raised in the same period last year, a report showed on Thursday.

It was an uneventful quarter in terms of IPOs and unicorns for the sector. A number of companies from the fintech space went public in Q1 2023, and there were no new entrants in the unicorn club.

However, this was a sharp jump of 126 per cent when compared with $523 million raised in Q4 of 2022, according to data provided by global SaaS-based market intelligence platform Tracxn.

The 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.

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, the report mentioned.

In the fintech space, India is the second-highest funded geography after the US in the first quarter, and occupies a spot in the top five geographies in terms of total funding activities.

“However, the funding is still on a declining trend when compared with previous years, although there has been an uptick in funding over the past few quarters,” the report added.

Sequoia Capital, AngelList and Y Combinator are the most active investors in the country’s fintech space.