India remains as world’s 3rd-largest fintech funding destination with Bengaluru in the lead

India has maintained its position as the world’s third-largest fintech funding destination in the first half of 2025, following the United States and the United Kingdom, despite a slowdown in overall capital inflows. According to market intelligence firm Tracxn, the Indian fintech sector attracted $889 million during this period, reflecting a 26% drop from the latter half of 2024 and a 5% decline year-on-year.

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The downturn was most visible in late-stage and seed-stage funding. Late-stage investments plummeted by 41% to $437 million, while seed funding fell 27% to $91.2 million. However, early-stage ventures offered a bright spot, securing $361 million—a 10% rise from H2 2024 and 9% higher than H1 2024—indicating sustained investor interest in scalable, innovation-led models.

Bengaluru continued to be the epicenter of fintech activity, accounting for 55% of total funding, followed by Mumbai at 14%. M&A activity surged, with 16 acquisitions recorded, marking a 45% increase from H1 2024. Though slightly below H2 2024’s count, the trend highlights growing consolidation in the sector.

Investor participation remained broad-based. Peak XV, Angel List, and LetsVenture topped the overall funding charts, while Accel emerged as the most active venture capital firm, closing 34 deals.

Despite current headwinds, India’s fintech ecosystem continues to demonstrate resilience and global relevance.