According to Tracxn, in the first half of 2025, the fintech industry in India raised $889 million through a variety of investment rounds. After the United States and the United Kingdom, India now ranks as the third largest country for fintech funding in the world. But according to a new research, funding fell by 26% in 2024’s second half.   This demonstrates that investors are exercising prudence due to the volatility of the global economy.

Fintech Funding Slows Down in H1 2025

India’s fintech sector attracted $889 million in venture capital in the first half of 2025. This is a decline from the $1.2 billion raised in the second half of 2024. Analysts say this slowdown is due to economic challenges, rising interest rates, and more careful investor evaluation of business sustainability and compliance.

The number of deals also decreased significantly, with only 86 recorded in the first half of 2025, down from 123 in the second half of 2024.

LendingTech & Payments Still Lead

Certain fintech sectors are still operating efficiently even when funding has decreased. Over 60% of all funding went to LendingTech and Payments startups. Notable funding sums include of:

-In Series B, Zolve raised $50 million.

-In Series D, KreditBee raised $80 million.

–MobiKwik: Initial Public Offering

On the other hand, when investors grew increasingly doubtful of long-term business concepts, WealthTech and InsurTech collapsed.

India’s Fintech Market Still a Global Contender

India’s fintech ecosystem is still one of the most active in the world, despite recent funding cuts. This is due to its large unbanked population, government initiatives like UPI and Aadhaar, and the growing need for financial inclusion. India ranks as the third-largest recipient of fintech funding, solidifying its important place in the global fintech landscape. This strength, even during tough times, shows lasting confidence in the sector.

Outlook: Course Correction or Long-Term Plateau?

The current drop in funding might look worrying, but many experts consider it a normal adjustment, not a crisis. With initial public offerings (IPOs) expected in late 2025 and clearer regulations coming, the fintech sector could pick up speed again by the fourth quarter of 2025.

Startups are now focusing on making profits, meeting regulations, and driving innovation. This is a positive change from the previous emphasis on rapid growth at any cost.

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