In the first half of 2024, India’s fintech sector raised US$795 million, which was good enough to place it in the top three markets globally in terms of funds raised. That’s the good news. Now here is the bad news. That figure was a 59% decrease from US$1.93 billion in the first half of 2023, according to Indian market research firm Tracxn.

Thus far in 2024, have been just two US$100 million+ funding rounds: Avanse’s $120 million Series C and Credit Saison’s $144 million Series D. With regards to Avanse, it marks the first investment in India’s financial services sector by Abu Dhabi-based Mubadala and is part of a plan to double the company’s exposure in Asia by 2030. Mubadala did not disclose the size of its investment in Avanse.

The only fintech unicorn that has been minted so far is Perfios, which provides real-time credit underwriting solutions to its clients. Perfios’s algorithms are used by banks, fintechs and insurance companies to reduce risk, spot fraud, and boost the quality of their portfolios. The company is reportedly on the hunt for M&A targets and is mulling an IPO in 2025.

Looking ahead, we do expect that the fintech funding pipeline in India will remain healthy, even if the torrid growth of recent years is unlikely to return. Notably auguring well for India is that unlike in China, where a slowing economy and tough regulatory environment for tech companies has stymied new investment in digital financial services, the subcontinent’s business environment remains largely favorable for fintech firms.

In fact, the Indian economy expanded at an 8.2% clip in the 2024 fiscal year. Growth is expected to moderate slightly to 7.2% in FY2025 – still among the highest of any major economy.