BENGALURU: The fintech sector has started witnessing an upswing in funding in the third quarter of 2023, as it received $436 million in funding, a 68% rise compared to $259 million raised in Q2 2023. However, it is a 55% decline from $967 million in Q3 2022.
A report by Tracxn says the growth is majorly due to the increase in funding in late-stage rounds as they saw funding of $326 million, a 141% rise as against $135 million raised in the quarter-ago period. Perfios, a real-time credit-decision platform, secured $229 million in a series D round led by Kedaara Capital in Q3.
Neha Singh, co-founder, of Tracxn said, “In a time of global economic uncertainty, India’s fintech sector has demonstrated resilience and growth. The surge reflects the industry’s dynamism and innovation, positioning India as a leading global fintech player.” The report added that banking tech received funding of $282 million in Q3, which is a growth of 396% compared to the quarter-ago period.
The quarter saw seven acquisitions, a drop of 12% from eight acquisitions in the year-ago period. Zaggle and Veefin went public in Q3 2023, and Bengaluru emerged as the leader in total fintech funding raised during Q3 2023, followed by Mumbai and Noida. Peak XV Partners, Y Combinator and Accel were the top investors in the space.
Y Combinator, 9Unicorns and Upsparks Capital led the seed investments, while Accel, Elevation and Lightspeed Venture Partners were prominent in early-stage investments, the report added. Interestingly, Alternative Lending saw a growth of 259% compared to Q2, 2023, reaching $305 million in funding.