Bengaluru: India’s fintech startup ecosystem secured $778 million in funding during the July-September period, reaching second place globally after the United States in terms of fintech funding raised in the third quarter, according to a report released on Tuesday .
This growth can be attributed to government initiatives such as the promotion of digital payments through UPI, with over 14 billion transactions processed in May, the JAM-Trinity initiative integrating Aadhaar with bank accounts and mobile numbers, and the allocation of Rs 2,600 crore in incentives. to support fintech startups.
This also represents a 66 percent increase from the $471 million raised in the third quarter of last year and an impressive 165 percent increase from the $293 million raised in the second quarter of this year, according to the report from Tracxn, a SaaS-based business intelligence platform.
The third quarter also saw two startups achieve IPO status and one company become a unicorn.
“The resurgence of funding for the Indian fintech industry marks a pivotal moment in our journey to becoming a global fintech hub,” said Neha Singh, co-founder, Tracxn.
“With increasing digital adoption and supportive government policies, we are positioned for sustainable growth,” she added.
According to the report, India now ranks fourth in terms of all-time funding for the fintech sector, after the US, China and the UK.
The best performing sectors included alternative lending, investment technology and payments. The alternative lending segment raised $517 million, an increase of 49% from $348 million in Q3 2023 and 199% growth from $173 million in Q2 2024.
Technology investment secured $109 million in Q3 2024, reflecting a 58% decline from $257 million in Q3 2023, but a significant 356% increase from $23.9 million in dollars of the second quarter of 2024.
In September, loan management platform Moneyview achieved unicorn status. Peak XV Partners, Y Combinator and Lets Venture have become major investors in the fintech space.