UPI ecosystem draws $5.8 billion in funding since 2021, says Tracxn

India’s payments ecosystem built around the Unified Payments Interface (UPI) has attracted about $5.8 billion in equity funding across 371 disclosed rounds since 2021, with consumer-facing applications accounting for the largest share of investor capital, according to a report by Tracxn released on Thursday.

The funding has increasingly concentrated around a handful of established players, with CRED, PhonePe, Pine Labs, Razorpay and BharatPe together accounting for about 66% of the disclosed capital raised during the period. The trend signals a shift in investor preference towards scaled category leaders rather than the broader long tail of payments startups.

Consumer-facing payments companies attracted about 53% of the total funding, or roughly $3.1 billion. Business payments firms accounted for around 38%, at approximately $2.2 billion, while the infrastructure and enablement layer, including APIs, switches and other payment infrastructure, received about 9%, or $526 million.

The report, titled The India Payments Landscape: How UPI Made India Self-Reliant in Payments, said the sector has also moved beyond fundraising towards generating exits and consolidation. Since 2021, payments companies have recorded eight initial public offerings (IPOs) and 25 acquisitions.

Paytm, which listed in November 2021, and Pine Labs, which went public in November 2025, are among the prominent companies to access public markets. Other listed payments players include MobiKwik and Zaggle.

At the same time, established players have become active acquirers. Razorpay has acquired Ezetap and IZealiant, while Pine Labs has acquired Setu and Mosambee. Other major players, including M2P, Juspay, PayU and Perfios, have also used acquisitions to expand their capabilities.

Across their lifetimes, the 10 best-funded companies in the sector have raised about $9.4 billion. Paytm leads with $2.8 billion, followed by PhonePe at $1.7 billion and CRED at $1.5 billion.

The expansion of UPI has provided the underlying demand for this private-sector investment. According to the report, UPI accounted for nearly 49% of global real-time payment transactions, based on ACI Worldwide data. In India, the platform processed around ₹314 lakh crore worth of transactions in FY26, averaging about 66 crore transactions a day.

UPI is also increasingly becoming an exportable payments capability. Cross-border UPI transactions rose more than 20-fold from around 37,060 in FY24 to over 7.5 lakh in FY25, with the system now operational in more than 12 countries.

The report noted that the next phase of growth will depend on creating a sustainable funding model for the payments infrastructure. While processing a UPI transaction costs around 0.25%, government incentives have covered only about 10-11% of the cost.

With UPI expanding into areas such as credit, cross-border payments, offline transactions and fraud prevention, the report said maintaining a financially sustainable commercial ecosystem around the public payments rail will be critical for its continued growth.