India’s fintech startup ecosystem witnessed a 17% year-on-year decline in funding, raising $1.6 billion in the first nine months of 2025, according to the latest India FinTech Funding 9M 2025 report by Tracxn. Despite the slowdown, India retained its position as the third-largest fintech hub globally, behind only the United States and the United Kingdom, underscoring its sustained importance in the global startup landscape.

Key Highlights

• India’s fintech funding dropped 17% in 2025 amid cautious investor sentiment and macroeconomic challenges.
• Early-stage startups witnessed increased funding traction, reflecting investor focus on innovation and scalable business models.

Interestingly, the report highlights a positive shift in early-stage funding, which rose 8% year-on-year to $598 million. This increase reflects strong investor confidence in new and emerging fintech ventures, even as broader funding activity cooled. However, seed-stage funding dropped 38% to $129 million, and late-stage funding fell 23% to $863 million, indicating continued caution among investors toward mature, growth-stage startups.

“India’s fintech ecosystem continues to demonstrate resilience amid a period of funding moderation,” said Neha Singh, Co-founder of Tracxn. “The consistent activity at the early stage and emergence of new unicorns highlight sustained investor confidence in the sector’s long-term potential.”

The year also saw two $100 million+ funding rounds, compared to three during the same period last year. Investment platform Groww led the way with a $202 million Series F round, followed by Weaver Services, which raised $170 million. In addition, 23 acquisitions were recorded—one more than last year—with the largest being Diginex’s $2 billion acquisition of Resulticks. Groww also acquired Fisdom for $150 million, strengthening its wealthtech portfolio. Meanwhile, Seshaasai, a digital security firm, was the only fintech company to go public during the period.

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Geographically, Bengaluru and Mumbai continued to dominate India’s fintech landscape, accounting for 52% and 22% of total funding, respectively. Both cities reaffirmed their status as the country’s leading innovation hubs. The sector also added two new unicorns, matching last year’s tally, signaling steady growth momentum.

Among investors, Peak XV Partners, Bessemer Venture Partners, and GMO Venture Partners emerged as the top backers in the early stage, while SoftBank Vision Fund and Sofina led major late-stage rounds.

Despite funding headwinds, India’s fintech ecosystem remains resilient, driven by innovation, regulatory support, and investor optimism about long-term digital financial inclusion.