Unlocking Indian FinTech‘s Resilience: Funding Winter
The Indian FinTech sector saw fantastic growth in recent years, which paved the way for technology start ups focused on fintech to grow rapidly. But from the end of last year until now the fintech ecosystem has seen a 60% drop in funding which brought down
The fintech space has witnessed a 60 per cent year-to-date slump in funding, which shot down funding from $3.7 billion in 2022 to $1.3 billion in the current year. The big players are the most effected, with impact on global technology ecosystem, with investor apprehensions looming largely due to cryptocurrency and insipid metaverse progress. However, early stage fintech companies are still thriving.
India stands at 3rd place in terms of fintech companies with a total of 9646 companies and growing while USA and UK lead the pack with 31950 companies and 12787 companies respectively.
The Funding Outlook
2022 was a bad year for start ups as a whole, the funding winter hit the Indian market quite badly and we saw a 40% slump, which has risen to 60% in the fintech ecosystem. But the Indian scenario is a little different. From 2017 to 2019, the funding of fintech start ups remained largely consistent, and saw a surge during the 2020-21-time frame largely due to the covid impact. Which means, more fintech start ups have been funded in India despite the funding winter.
60% of these funding was done in early-stage startups in 2022 compared to 45% in 2021. The average deal values have been around $18-20 million for period of 2017 to 19 and went right up in 2020 and 2021, came down moderately in the last quarter of 2022 and then has started climbing up in 2023 again.
So overall outlook on the funding winter impacting fintech start ups in India, might not be too bad. Although late stage start ups will see the impact, the early stage fintech start ups will see a positive funding atmosphere.
If you are an early stage start up and if you want to engage with India’s largest gathering of the financial ecosystem including VCs, investors and funding companies, then you should not miss out on participating in the 2nd Edition of FinTech India Summit & Awards