Fintech start-ups signed more deals but saw only slight uptick in funding
Fintech start-ups signed more deals but saw only slight uptick in funding
Fintech funding rounds 2022 showed a 28% increase in deals over last year but only a 2.7% increase in funding amount, as per an analysis by Connexdoor; 149 fintech deals happened in 2021 whereas 2022 till July saw 191 deals
Ashish Rukhaiyar
- Aug 9, 2022,
- Updated Aug 9, 2022 2:01 PM IST
Funding in the fintech start-up arena has tapered over the last six months after hitting a peak in January 2022 with 35 deals. Further, a comparative study between 2021 and 2022 showed that while more deals have happened so far in 2022 - up 28 per cent over last year - only a marginal increase in funding amount of around 2.7 per cent was witnessed.
Advertisement
According to a latest analysis by Connexdoor, a fintech-focused investment platform, a total of 191 deals happened in 2022 up to July, raising a cumulative $3.4 billion whereas the whole of 2021 saw 149 fintech deals with a total fund raising of $3.3 billion.
In the current calendar year, 93 deals were in the Business To Consumer (B2C) category followed by 76 in Business To Business (B2B) and 21 in the B2B2C space. Further, 96 deals were in the early-stage segment.
In terms of the geographical spread, Bengaluru emerged as the leading fintech hub with 84 deals, followed by NCR with 35 and Mumbai with 34 deals.
The study attributed the tapering to the current global macroeconomic conditions that has led to central banks raising interest rates, which, in turn, led to money flowing towards relatively safer assets and start-ups feeling the pinch.
Advertisement
“Month-on-month deals have been consistently falling since January 2022. Except for June 2022, the number of fintech deals in India has been decreasing,” said Sagrika Shah, co-founder, Connexdoor.
“The month of July saw almost half the deals when compared to January. While the amount of inflow remains stagnant Y-o-Y basis, we see an evident slowdown in the traction, which we expect shall get worse,” added Shah.
According to the study, over 40 per cent of the total amount was deployed in the lending space, whereas WealthTech and EmergingTech saw a growth rate of over 100 per cent in terms of deals and funding amount. Further, over 60 per cent of wealth and emerging tech deals were in the early stages.
Advertisement
This was primarily on the back of increased traction in segments like BNPL – Buy Now Pay Later - and neo-banking, as per the Connexdoor study.
Meanwhile, 564 PE/VC firms participated in the funding rounds in 2022, an increase from last year’s 375. However, while VC participation increased in the current calendar year, there was only a marginal increase in funding amount. Debt transactions dropped significantly to 14 in the current calendar year till July from 44 in 2021.
Also read: India home to 75,000 start-ups; 7.56 lakh jobs created, says Piyush Goyal
Also read: Start-up VC funding in India up 4.5% YoY in H1 2022; China sees slowdown: GlobalData
Funding in the fintech start-up arena has tapered over the last six months after hitting a peak in January 2022 with 35 deals. Further, a comparative study between 2021 and 2022 showed that while more deals have happened so far in 2022 - up 28 per cent over last year - only a marginal increase in funding amount of around 2.7 per cent was witnessed.
Advertisement
According to a latest analysis by Connexdoor, a fintech-focused investment platform, a total of 191 deals happened in 2022 up to July, raising a cumulative $3.4 billion whereas the whole of 2021 saw 149 fintech deals with a total fund raising of $3.3 billion.
In the current calendar year, 93 deals were in the Business To Consumer (B2C) category followed by 76 in Business To Business (B2B) and 21 in the B2B2C space. Further, 96 deals were in the early-stage segment.
In terms of the geographical spread, Bengaluru emerged as the leading fintech hub with 84 deals, followed by NCR with 35 and Mumbai with 34 deals.
The study attributed the tapering to the current global macroeconomic conditions that has led to central banks raising interest rates, which, in turn, led to money flowing towards relatively safer assets and start-ups feeling the pinch.
Advertisement
“Month-on-month deals have been consistently falling since January 2022. Except for June 2022, the number of fintech deals in India has been decreasing,” said Sagrika Shah, co-founder, Connexdoor.
“The month of July saw almost half the deals when compared to January. While the amount of inflow remains stagnant Y-o-Y basis, we see an evident slowdown in the traction, which we expect shall get worse,” added Shah.
According to the study, over 40 per cent of the total amount was deployed in the lending space, whereas WealthTech and EmergingTech saw a growth rate of over 100 per cent in terms of deals and funding amount. Further, over 60 per cent of wealth and emerging tech deals were in the early stages.
Advertisement
This was primarily on the back of increased traction in segments like BNPL – Buy Now Pay Later - and neo-banking, as per the Connexdoor study.
Meanwhile, 564 PE/VC firms participated in the funding rounds in 2022, an increase from last year’s 375. However, while VC participation increased in the current calendar year, there was only a marginal increase in funding amount. Debt transactions dropped significantly to 14 in the current calendar year till July from 44 in 2021.
Also read: India home to 75,000 start-ups; 7.56 lakh jobs created, says Piyush Goyal
Also read: Start-up VC funding in India up 4.5% YoY in H1 2022; China sees slowdown: GlobalData
Read more!