Fintech funding jumps 144% to $637 million in January led by large rounds in PhonePe, KreditBee

Funding in India’s fintech start-ups increased by 144 per cent to $637 million in January, compared to $261 million in December 2022, led largely by two $100 million+ rounds in PhonePe and KreditBee, according to Tracxn. 

Walmart-owned PhonePe raised $350 million in a Series D round led by General Atlantic at a pre-money valuation of $12 billion, making it India’s most valuable fintech. Meanwhile, KreditBee, an online marketplace for personal loans, raised $120 million in Series D funding led by Advent International. This funding occurred just a month after its $80 million fundraise led by MUFG in December. 

Fintech also emerged as the most funded sector last month, followed by enterprise SaaS and energy tech. “The increased adoption of digital financial services like UPI by consumers has been the major reason for the hike. The introduction of CBDC (Central Bank Digital Currency) is also expected to boost the sector,” Tracxn stated in its findings. 

Overall start-up funding in January saw a minor uptick of 3 per cent  to $962 million, even though the number of funding rounds dropped by 22 per cent during the same period. Seed-stage and early-stage deals witnessed a slowdown of 9 per cent and 30 per cent respectively. Late-stage funding, however, increased by 16 per cent since December. Accel, Sequoia Capital, and Y Combinator, were the top three VCs in January.  

Energy tech recorded a substantial growth of 386 per cent in investments from December 2022. Favourable government policies and increasing concerns around pollution and climate change are accelerating growth in this space.

The sector that recorded a significant slowdown in funding was food and agritech, with investments falling 82 per cent from $319 million in Dec 2022 to $56.8 million in Jan 2023. However, things could look up in the coming months. “The recent Union Budget proposed the formation of the Agriculture Accelerator Fund to encourage and accelerate the digital infrastructure for the agricultural sector and this will also help in the long term growth of startups in this space,” Tracxn added. 

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