Indian fintech startups attracted investments worth $800 Mn in Q2 2023, a decline of 38% compared to $1.3 Bn raised in Q1 2023, according to data compiled by Inc42
Beyond innovative business models, Indian fintech startups also recognise the importance of optimising operations to save money and exhibit profitability potential
Fintech startups in India also face a complex and evolving regulatory environment, as the government has moved consistently to end regulatory arbitrage in the segment
A funding winter is a period of reduced venture capital (VC) funding during which investors become cautious and risk-averse, resulting in a lack of funds for startups. The global economic meltdown has had some knock-off effects on the Indian fintech industry as well.
However, the adoption rate of Indian fintech is on the rise. Per the Economic Survey 2022-23, Indian fintech companies witnessed an 87% adoption rate across varied user bases, beating the global average by 2300 percentage points.
With 2,100+ fintech startups, India is the third-largest fintech ecosystem in the world. Indian fintech startups attracted investments worth $800 Mn in Q2 2023, a decline of 38% compared to $1.3 Bn raised in Q1 2023, according to data compiled by Inc42.
However, the total funds raised were 57% lower than the $1.8 Bn raised in Q2 2022. While the number of funding rounds in Q2 2023 experienced a jump of 20% in Q2 2023 compared to Q1 2023, the funding deals fell 56% compared to Q2 2022.
Despite the challenges, the fintech ecosystem has remained resilient, promoting innovation, improving operational efficiency and prioritising regulatory compliance to succeed.
