Fintech Startups Witness 35% Fall in Funding to $366 Million in Q1 2025
Financing for fintech startups fell by 35% to $366 million during the first quarter of 2025 (January-March) mainly because of macroeconomic challenges and geopolitical risks. This is a sharp decline from the $571 million raised in the same quarter of last year. Fintech startups raised an equivalent amount of $365 million in Q4 2024, as per market intelligence platform Tracxn.
Q1 2025 witnessed seed-stage and early stage funding crashing by 56% to $92.6 million from $210 million in Q1 2024, and decreasing 41% from $157 million in Q4 2024. Seed-stage funding too crashed to $45.9 million, decreasing by 39% from $75.5 million in Q1 2024 and 16% from $54.6 million in the last quarter.
Neha Singh, Tracxn Co-Founder, said, "While there has been a decline in funding levels, the long-term growth prospects of the Indian fintech industry remain strong. With rising regulatory clarity, the growth in digital payments, and a larger global footprint, we see great opportunities for fintech startups in the future."
In March alone, fintech startups raised $187 million, which is 51% of the quarter's total funding. The Banking Tech sector was the most funded sector, with $108 million, a 9% rise from the $99 million raised in the same quarter last year. Zolve, a cross-border neo bank provider, raised $51 million in Series B funding, which is 47% of the funding in this sector.
The Internet First Insurance Platforms space witnessed an astonishing 1,391% boost in funding to $87 million in Q1 2025, up from a mere $5.84 million in Q1 2024 and zero funding in Q4 2024.
Interestingly, the quarter did not yield any unicorns, as opposed to one unicorn in Q1 2024. Further, there were no IPOs in this period, as opposed to one IPO in the corresponding quarter last year and two in Q4 2024. Bengaluru dominated overall fintech funding in Q1 2025, followed by Gurugram and Mumbai.
Q1 2025 witnessed seed-stage and early stage funding crashing by 56% to $92.6 million from $210 million in Q1 2024, and decreasing 41% from $157 million in Q4 2024. Seed-stage funding too crashed to $45.9 million, decreasing by 39% from $75.5 million in Q1 2024 and 16% from $54.6 million in the last quarter.
Neha Singh, Tracxn Co-Founder, said, "While there has been a decline in funding levels, the long-term growth prospects of the Indian fintech industry remain strong. With rising regulatory clarity, the growth in digital payments, and a larger global footprint, we see great opportunities for fintech startups in the future."
In March alone, fintech startups raised $187 million, which is 51% of the quarter's total funding. The Banking Tech sector was the most funded sector, with $108 million, a 9% rise from the $99 million raised in the same quarter last year. Zolve, a cross-border neo bank provider, raised $51 million in Series B funding, which is 47% of the funding in this sector.
The Internet First Insurance Platforms space witnessed an astonishing 1,391% boost in funding to $87 million in Q1 2025, up from a mere $5.84 million in Q1 2024 and zero funding in Q4 2024.
Interestingly, the quarter did not yield any unicorns, as opposed to one unicorn in Q1 2024. Further, there were no IPOs in this period, as opposed to one IPO in the corresponding quarter last year and two in Q4 2024. Bengaluru dominated overall fintech funding in Q1 2025, followed by Gurugram and Mumbai.
