The last six months of funding in the fintech start-up arena have gone down after hitting a peak in January 2022 with 35 deals. A comparative study between 2021 and 2022 showed that while more deals have happened so far in 2022 - up 28 per cent over last year - only a marginal increase in funding amount of around 2.7 per cent was seen.
A total of 191 deals happened in 2022 up to July, raising a total of $3.4 billion, while there were 149 deals with a total fund raising of $3.3 billion, according to a latest analysis by Connexdoor.
There were 96 deals in the early-stage segment.
Bengaluru emerged as the leading fintech hub with 84 deals, followed by NCR with 35 and Mumbai with 34 deals.
The study attributed the tapering to the current global macroeconomic conditions that led to central banks raising interest rates, which has resulted in money flowing towards relatively safer assets and start-ups feeling the pinch.
Sagrika Shah, co-founder of Connexdoor, said that the number of fintech deals in India has decreased except for June 2022.
The month of July saw almost half of the deals compared to January. While the amount of inflow remains stagnant Y-o Y, we see an evident slowdown in the traction, which we expect to get worse, said Shah.
Over 40 per cent of the total amount was deployed in the lending space, while WealthTech and EmergingTech saw a growth rate of over 100 per cent in terms of deals and funding amount. Over 60 per cent of the wealth and emerging tech deals were in the early stages.
This was mainly due to increased traction in segments like BNPL Buy Now Pay Later and Neo-Banking, as per the Connexdoor study.
In the funding rounds in 2022, 564 PE VC firms participated, an increase from last year s 375. The funding amount was slightly increased in the current calendar year, but there was only a marginal increase in funding amount. Debt transactions dropped significantly to 14 in the current calendar year from 44 in 2021 in July.
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