Seed funding sinks 65% as late-stage lifts fintech in Q1 2026
Overall funding in the sector rose by just 2% to $513 million in the January-March quarter.
India's fintech sector saw deal value at the seed and early-stages decline in the January-March quarter of 2026 on a year-on-year basis but late-stage funding witnessed a jump.
Seed funding in the sector fell sharply by 65% to $25.7 million during the quarter from $75.3 million in the same period in 2025, as per market intelligence platform Tracxn. Seed funding in the sector also dropped on a sequential basis by 29%, it said.
The sector saw early-stage funding decrease 13% year-on-year to $214 million during the quarter and 47% on a sequential basis.
In contrast, late-stage funding jumped 13% on a year-on-year basis to $273 million in quarter ended March and 126% on a sequential basis. The largest deal during the sector was the $156 million funding in housing finance platform Weaver Services led by Premji Invest and Lightspeed, and it was the only deal over $100 million during the quarter.
"The signal is not retreat, but selection: investors are writing bigger cheques into fewer, later-stage companies with demonstrated unit economics," it said.
Overall funding in the sector rose by just 2% on a year-on-year basis to $513 million in the January-March quarter.
Total round count also fell during the quarter to 45 from 99 in the same quarter last year. The number of Series A and beyond deals in the fintech sector in India fell to 24 in the January-March quarter this year from 38 in the same period this year. Notably, first-time funded companies dropped from 23 to just 7 during the March quarter this year.
The report also noted that online lending attracted 60% of quarterly funding, while adjacent fintech categories saw only modest activity.
In terms of geography, Mumbai-based companies received 61% of all fintech funding in the quarter at $311 million followed by Bengaluru with 30% funding worth $152 million. Gurugram, Delhi, and Chennai together made up less than 10%, it said.
Interestingly, in the same quarter in 2025, Mumbai held only 9% share while Bengaluru commanded 51% of quarterly capital.
"The shift tracks the rise of lending and affordable-housing fintech, sectors where Mumbai's proximity to banks, NBFCs, and insurance capital is a structural advantage," it said.