BENGALURU: Macroeconomic challenges and geopolitical headwinds have resulted in decline of fintech funding in Q1 calendar year 2025 (January-March). The first quarter of 2025 witnessed a total funding of $366 million, a decrease of 35% compared to $571 million raised in the same quarter last year. The fintech sector raised similar funding ($365 mn) in Q4 2024, according to market intelligence platform Tracxn.
The March quarter witnessed a 56% drop in early-stage funding at $92.6 million compared to $210 million in Q1 2024 and a 41% decrease from $157 million raised in Q4 2024.
Seed-stage funding witnessed $45.9 million in funding, a decline of 39% compared to $75.5 million raised during Q1 2024 and a 16% decline compared to $54.6 million raised in the previous quarter.
Neha Singh, Co-Founder Tracxn, said, "The Indian fintech sector continues to evolve despite market fluctuations. While funding levels have declined, the industry's long-term growth potential remains strong. With increasing regulatory clarity, digital payment expansion, and a rising global footprint, we anticipate exciting opportunities for Fintech start-ups in the coming years."
In March alone, fintech start-ups raised $187 million, accounting for 51% of the total funds.
According to the report, Banking Tech was the highest-funded sector as it received a funding of $108 million, a 9% increase compared to the $99 million raised in the same quarter last year. Zolve, a provider of a cross-border neo-bank for individuals, raised $51 million in Series B funding, accounting for 47% of the funding in this space.
The Internet First Insurance Platforms, the second-highest funded sector, witnessed $87 million in funding in Q1 2025, a 1,391% increase compared to $5.84 million raised in Q1 2024 and no funding raised in Q4 2024.
The quarter also did not witness any unicorns compared to that of 1 unicorn in Q1 2024. Also, no IPOs emerged in the quarter, compared to 1 IPO in the year-ago period and 2 IPOs in Q4 2024.
Bengaluru emerged as the leader in total fintech funding raised during Q1 2025, followed by Gurugram and Mumbai.