Fintech funding recovers in Q1 2023; jumps 126% over December quarter
Funds such as Premji Invest, General Atlantic, and TVS Capital were the most active late-stage investors in fintech in the March quarter
- Apr 13, 2023,
- Updated Apr 13, 2023 6:56 PM IST
India’s fintech sector, the darling of venture capitalists, drew investments worth $1.2 billion in the just-ended March quarter (Q1 2023), recording an impressive 126 per cent jump over the last quarter (Q4 2022), per Tracxn data.
The growth was led by late-stage investments worth $977 million, including six large $100 million+ rounds in startups such as PhonePe, Mintify, Insurance Dekho and KreditBee, among others. PhonePe alone has raised a total of $650 million in multiple Series D rounds in Q1 2023. During the quarter, Premji Invest, General Atlantic, and TVS Capital emerged as the most active late-stage investors, according to Tracxn.
While the quarter-on-quarter of the sector is a positive sign, fintech funding has declined 55 per cent year-on-year compared to the $2.6 billion raised in Q1 2022. “The fintech space in India is the second-highest funded geography after the US in Q1 2023, and occupies a spot in the top five geographies in terms of total funding activities. However, the funding is still on a declining trend when compared with previous years, although there has been an uptick in funding over the past few quarters,” Tracxn stated in its report.
While late-stage funding recovered, early-stage deals in Q1 2023 were down 30 per cent QoQ to $177 million and 76 per cent YoY from Q1 2022. Seed-stage funding too dropped 21 per cent QoQ to $30.2 million during the March quarter. Y Combinator, 100X.VC, and LetsVenture were the top seed-stage investors in this period.
In terms of IPOs and unicorns too, fintech had a fairly uneventful quarter. “However, there was a slight uptick in acquisitions. The sector witnessed 11 acquisitions in Q1 2023, as against six acquisitions in Q4 of 2022,” Tracxn data revealed.
Despite the slight dip in the last 12-15 months as a result of the larger capital market slowdown, fintech continues to be the most attractive sector for global investors given India’s large consumer base that has lapped up online payments, alternative lending, digital insurance, and other allied financial services.
“Further, the government’s push to promote a cashless economy combined with rising internet penetration in both rural and urban areas have contributed substantially in developing this sector within the country,” the report added.
India’s fintech sector, the darling of venture capitalists, drew investments worth $1.2 billion in the just-ended March quarter (Q1 2023), recording an impressive 126 per cent jump over the last quarter (Q4 2022), per Tracxn data.
The growth was led by late-stage investments worth $977 million, including six large $100 million+ rounds in startups such as PhonePe, Mintify, Insurance Dekho and KreditBee, among others. PhonePe alone has raised a total of $650 million in multiple Series D rounds in Q1 2023. During the quarter, Premji Invest, General Atlantic, and TVS Capital emerged as the most active late-stage investors, according to Tracxn.
While the quarter-on-quarter of the sector is a positive sign, fintech funding has declined 55 per cent year-on-year compared to the $2.6 billion raised in Q1 2022. “The fintech space in India is the second-highest funded geography after the US in Q1 2023, and occupies a spot in the top five geographies in terms of total funding activities. However, the funding is still on a declining trend when compared with previous years, although there has been an uptick in funding over the past few quarters,” Tracxn stated in its report.
While late-stage funding recovered, early-stage deals in Q1 2023 were down 30 per cent QoQ to $177 million and 76 per cent YoY from Q1 2022. Seed-stage funding too dropped 21 per cent QoQ to $30.2 million during the March quarter. Y Combinator, 100X.VC, and LetsVenture were the top seed-stage investors in this period.
In terms of IPOs and unicorns too, fintech had a fairly uneventful quarter. “However, there was a slight uptick in acquisitions. The sector witnessed 11 acquisitions in Q1 2023, as against six acquisitions in Q4 of 2022,” Tracxn data revealed.
Despite the slight dip in the last 12-15 months as a result of the larger capital market slowdown, fintech continues to be the most attractive sector for global investors given India’s large consumer base that has lapped up online payments, alternative lending, digital insurance, and other allied financial services.
“Further, the government’s push to promote a cashless economy combined with rising internet penetration in both rural and urban areas have contributed substantially in developing this sector within the country,” the report added.