India’s Fintech Sector Bounces Back With 66% YoY Growth In Q3 2024

New Delhi, Oct 16 (KNN) India’s fintech ecosystem is experiencing a significant resurgence, posting a 66 per cent year-on-year (YoY) growth in funding to USD 778 million in Q3 2024, according to the latest report by Tracxn.

This is a notable leap from the USD 471 million raised during the same period in 2023, highlighting renewed investor confidence in the sector.

The report underscores India’s emerging influence, stating, “India ranks 4th in all-time funding for the fintech sector, behind the US, China, and the UK. However, in Q3 2024, India surged to the 2nd position globally in quarterly funding, only behind the United States.”

The momentum was fueled by a 165 per cent jump from the previous quarter, with fintech funding rising from USD 293 million in Q2 2024 to USD 778 million in Q3 2024. A major boost came from DMI Finance, which raised USD 334 million, specialising in loans for consumers and small businesses.

Alternative lending led the way, attracting USD 517 million, up 49 per cent from USD 348 million in Q3 2023. However, the investment technology segment saw a downturn, dropping 58 per cent to USD 109 million from USD 257 million last year.

The payments segment secured USD 93 million in Q3 2024, showing steady performance.

Despite the funding surge, the number of deals fell 25 per cent, with only 46 rounds in Q3 2024 compared to 62 rounds in Q3 2023, indicating a shift towards larger but fewer investments.

The report also highlights a 50 per cent decline in acquisitions, with only four fintech companies acquired in Q3 2024, compared to eight in the same quarter last year.

Additionally, RegTech and Insurance IT sectors struggled, with the former reporting no funding this quarter, in contrast to USD 238 million in Q3 2023. Insurance IT plummeted, receiving just USD 163,000 compared to USD 230 million last year.

Public offerings were also subdued, with only two companies going public, down from three IPOs in Q3 2023. However, India’s startup ecosystem celebrated a new unicorn, as Moneyview achieved unicorn status in September 2024.

“The resurgence in funding signifies a pivotal moment in India’s journey toward becoming a global fintech hub. Rising digital adoption and supportive policies are laying the foundation for sustained growth,” said Neha Singh, co-founder of Tracxn.

India’s fintech landscape continues to evolve, balancing challenges in niche segments with promising growth in core areas like lending and payments.

With global funding momentum and robust innovation, the ecosystem is well-positioned to play a transformative role in the future of finance.

(KNN Bureau)