India ranks 3rd globally in fintech startup funding: Tracxn

India’s fintech sector raised $889 million in the first half of 2025, a 5% drop from $936 million in the same period last year and a 26% decline from $1.2 billion in H2 2024, according to market intelligence platform Tracxn.

Despite these fluctuations, India ranked third globally, trailing only the United States and the United Kingdom, said Tracxn’s Geo Semi-Annual India FinTech Report.

“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 Neha Singh, co-founder, Tracxn.

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

Funding trends across stages in H1 2025 reflected a nuanced landscape for India’s fintech sector, the report said. Seed-stage startups raised $91.2 million, marking a decline of 27% from $126 million in H2 2024 and 33% from $137 million in H1 2024. In contrast, early-stage funding saw a resurgence, with $361 million raised, a 10% increase over $329 million in H2 2024 and a 9% rise from $333 million in H1 2024, highlighting renewed confidence in startups with initial traction. However, late-stage funding dropped to $437 million, a 41% decline from $745 million in H2 2024 and 6% from $467 million in H1 2024.

H1 2025 witnessed 16 acquisitions, a 45% increase compared to 11 acquisitions in H1 2024, and a 6% decline from 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.

Bengaluru continued to lead India’s fintech funding landscape, accounting for 55% of total funding, followed by Mumbai at 14%.

The overall 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, U.S.-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.