Datanomics: Funding needs to scale up to meet Modi's fintech vision

India's fintech footprint is expanding, but a sharp funding gap and slowdown in new startups threaten to limit the sector's next phase of growth.

At the Global Fintech Fest on September 8, Prime Minister Narendra Modi declared that a new generation of fintech sector would drive the “Digital India” journey. However, industry data presents a more complex picture. The creation of new fintech companies and startups in India has slowed significantly. After rising from 1,050 in 2017 to a peak of 1,970 in 2021, new launches dropped sharply to 497 in 2025, before recovering slightly to 515 by August 2026. Despite the decline in launches, India's global presence continues to expand. The country's share of global fintech companies rose from 9 per cent in 2017 to 14 per cent by August 2026. However, international funding distribution remains heavily concentrated in Western markets. In 2025, the United States captured a dominant 46 per cent share of total global funding and the United Kingdom secured 12 per cent, while India held just 5 per cent. Within the domestic ecosystem, from 2017 to 2026, investment tech led the segment by accounting for 25 per cent of all companies, followed by payments at 14 per cent, and alternate lending at 11 per cent.