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Fintech investment falls to $29 million in April: The Digital Fifth Report

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India’s fintech sector saw a significant drop in investment activity in April, with only $29 million channeled into the space, according to a report by consulting firm BFSI The Digital Fifth. This brings cumulative investment in calendar year 2024 to $203 million.

In April, a significant part of the funds was directed to companies specialized in payment services, especially in the area of ​​cross-border payments. In addition, startups in the loan market segment attracted the interest of investors. In total, nine startups received funding this month, most of which are early-stage funding.

Gurgaon emerged as a key hub, accounting for 33% of funded companies in April. BankBazaar topped the list as the most funded startup, securing $9.6 million. Other notable startups that have received funding include insurance company Claimbuddy, cross-border payments company BriskPe and Paytech provider Innoviti.

The capital infusion is expected to propel these companies toward accelerated product development, market expansion, and potential strategic partnerships or acquisitions. Investors are interested in supporting startups that show a high level of innovation across different segments.

Known for its complexity, high costs, manual processes, lack of transparency and reconciliation issues, cross-border payments present significant opportunities for innovation. The sector has attracted significant investor interest, with startups such as BriskPe using the OPGSP framework to simplify and increase the transparency and speed of small-value cross-border payments for SMEs.

Companies like Perfios, IDfy and Mswipe have secured the highest funding in the Indian fintech space so far in 2024. Sameer Singh Jaini, founder and CEO of The Digital Fifth, expressed optimism about future investments, especially in segments such as corporate fintech, embedded finance, MSME loans, secured loans and property insurance. These areas are expected to attract significant investment driven by cutting-edge innovation and growing investor interest.

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Investments in the first four months of 2023 were $1,572 million, compared to $203 million this year. Digital Fifth’s month-on-month analysis of fintech investment over the past two years reveals a persistent slowdown. The analysis shows that only the most revolutionary innovations received funding, which signals the increasing selectivity of investors. Across India, Bangalore has remained the epicenter of the fintech ecosystem in the country.

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