Fintech funding declines by 26% in H12025, India ranks third globally: Tracxn

Despite these fluctuations, India ranked third globally, trailing only the US and the UK, the report added
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The funding in the fintech sector raised $889 million in the first half of 2025, a 26 per cent decline from the $1.2 billion raised in the second half of 2024, according to market intelligence platform Tracxn. In the year-ago period, the sector had raised $936 million in funding.

Despite these fluctuations, India ranked third globally, trailing only the US and the UK, the report added.

Commenting on their report findings, Neha Singh, Co-Founder, Tracxn, said, “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. Bengaluru’s dominance and the continued emergence of breakout companies reinforce India’s position as a global fintech powerhouse.”

Funding trends across stages in first half of 2025 reflecting a nuanced landscape in the sector. Seed-stage start-ups raised $91.2 million, marking a decline of 27 per cent from $126 million in H2 2024 and 33 per cent from $137 million in the year-ago period.

In contrast, early-stage funding saw a resurgence, with $361 million raised, a 10 per cent increase over $329 million in H2 2024 and a 9 per cent rise from $333 million in H1 2024, highlighting renewed confidence in start-ups with initial traction.

However, late-stage funding dropped to $437 million, a 41 per cent decline from $745 million in H2 2024 and 6 per cent from $467 million in H1 2024.

In the first six months of the year, the sector saw 16 acquisitions, a 45 per cent increase compared to 11 acquisitions in H1 2024, and a 6 per cent decline from 17 acquisitions in H2 2024.

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 the fintech funding landscape, accounting for 55 per cent of total funding, followed by Mumbai at 14 per cent.

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, US-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.

Published on July 4, 2025