India's fintech funding dips to $889 mn in H1 2025: Tracxn report

Indian fintech sector raised $ 889 million in the first six months of 2025, a drop of 26 per cent from $ 1.2 billion of H2 2024 and a five per cent slide from $ 936 million seen a year ago, according to a report by market intelligence platform Tracxn.

As per the report, India ranked third globally, trailing only the United States and the United Kingdom.

"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," Neha Singh, Co-Founder of Tracxn, said.

Bengaluru's dominance and the continued emergence of breakout companies reinforce India's position as a global fintech powerhouse, Singh added.

Funding trends across stages in H1 2025 revealed a nuanced landscape for India's fintech sector as early-stage funding fared better than seed-stage and late-stage infusions.

Seed-stage startups raised $ 91.2 million, a fall of 27 per cent from H2 2024 ($ 126 million) and 33 per cent from H1 2024 ($ 137 million).

In striking contrast, early-stage funding saw a resurgence with $ 361 million raised. This marked a 10 per cent increase over $ 329 million in H2 2024 and a 9 per cent rise from $ 333 million in H1 2024, underlining renewed confidence in startups with initial traction.

The late-stage funding, however, dropped to $ 437 million, a 41 per cent decline from H2 2024 ($ 745 million) and 6 per cent from H1 2024 ($ 467 million).

The first half (H1) of 2025 witnessed 16 acquisitions, higher than 11 acquisitions in H1 2024, but a tad lower than 17 acquisitions in H2 2024.

The highest-valued deal was Fisdom, acquired by Groww for $ 150 million, followed by Stocko, acquired by InCred Money for $ 35 million.

"While IPO activity remained muted with no fintech companies going public, one new unicorn emerged in the Indian FinTech space during the period, consistent with H2 2024, but an improvement over H1 2024, which saw none," Tracxn said.

Bengaluru, which cornered 55 per cent of total funding, continued to lead India's FinTech funding landscape, followed by Mumbai at 14 per cent.

Overall, the top investors in H1 2025 were Peak XV, Angel List and LetsVenture. In the early stage, which saw a surge in funding, the leading investors were Peak XV, Accel and Bessemer Venture Partners.

Blume Ventures, Venture Catalysts and 100Unicorns led investments at the seed stage, while SoftBank Vision Fund, Lathe Investment and Sofina were the top investors in the late-stage round.

"Among venture capital firms, US-based Accel led the highest number of investments with 34 rounds, while India-based Blume Ventures added 7 new companies to its portfolio during the period," the Tracxn report said.