Biggest Drop in Fintech Funding in CY22
Fintech start-ups fell in recent times after a big bull run last year. The funding peaked during the fourth quarter of 2021 but started declining now. Tracxn’s report shows that the Indian fintech funding was reduced by 50% in Q1 2022 compared with Q4 2021. The trend continues with a further drop in Q2 2022 by 16%. The factors responsible for the fall are the predicted economic changes, upcoming regulatory reforms, and Paytm’s poor IPO results.
August 2022 is the most significant slip in CY 2022 funding. The decline was massive, with a monthly drop of 51.3% compared to July 2022 and a 38% drop in August 2021. Fintech funding made high records in CY2021 and topped with 10.2 billion dollars for 543 rounds. Since 2017 this has been the most significant achievement. Only 4.9 billion dollars of funding was done in 301 rounds in CY2022. Bangalore leads with maximum funding, followed by Delhi and Mumbai, and the active investors of Fintech are Tiger Global, Better Capital, and Y Combinator.
The late stage of funding recorded a 71% decline in August 2022 compared to July 2022 and a 45% drop compared to August 2021. India is currently seen to perform better than others, with an increase in Fintech sector global funding by 6.1%. Comparing 2022 and its first eight months with the same last year, they had witnessed a rise of only 5.1%. Tracxn states that between 2017–2022, nearly 8,891 fintech start-ups were created. Of them, 1,426 acquired angel or seed funding, whereas 22% got Series A funding. Only 50 of them reached the Series D stage.
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