Fintech funding drops 17% in India; Early-stage startups hold steady

India’s fintech sector saw a 17% year-on-year decline in funding during the first nine months of 2025, raising $1.6 billion. Despite the overall slowdown, early-stage startups continued to attract investor interest, highlighting resilience in the ecosystem and ongoing confidence in emerging fintech ventures.

India’s fintech sector witnessed a slowdown in capital inflows during the first nine months of 2025, with total funding declining 17% year-on-year to US$ 1.6 billion, according to data from Tracxn. Despite the moderation, India retained its position as the third-largest fintech ecosystem globally, behind the United States and the United Kingdom.

The India FinTech Funding 9M 2025 report points to a mixed funding environment, where early-stage ventures have emerged as a relative bright spot. Funding for these companies increased 8% year-on-year to $598 million, underscoring investor confidence in newer, innovation-led business models.

In contrast, seed-stage investments fell 38% to US$ 129 million, while late-stage rounds dropped 23% to US$ 863 million, reflecting a broader caution around larger, growth-phase bets.

Neha Singh, Co-founder of Tracxn, noted that India’s fintech ecosystem continues to display resilience despite the funding slowdown. She added that sustained early-stage activity and the emergence of new unicorns reflect investors’ enduring confidence in the sector’s long-term potential.

Funding landscape and market activity

The period saw two major funding rounds exceeding US$ 100 million, compared with three during the same period last year. Investment platform Groww led with a US$ 202 million Series F round, followed by Weaver Services, which secured US$ 170 million in an undisclosed round.

Mergers and acquisitions remained steady at 23 deals, slightly higher than last year’s 22. The standout transaction was Diginex’s US$ 2 billion acquisition of Resulticks, while Groww also acquired wealthtech platform Fisdom for US$ 150 million. Digital security firm Seshaasai was the only fintech company to go public during this period.

Bengaluru and Mumbai continued to anchor India’s fintech growth, drawing 52% and 22% of total investments, respectively. The ecosystem also added two new unicorns, matching last year’s count. Among investors, Peak XV Partners, Bessemer Venture Partners, and GMO Venture Partners were active in early-stage rounds, while SoftBank Vision Fund and Sofina remained prominent in late-stage deals.