Gujarat's high profile GIFT city 'fails to attract' funds, India's FinTech investment dips

By Rajiv Shah
While the Narendra Modi government may have gone out of the way to promote the Gujarat International Finance Tec-City (GIFT City), sought to be developed as India’s formidable financial technology hub off the state capital Gandhinagar, just 20 km from Ahmedabad, a recent report, prepared by Tracxn Technologies suggests that neither of the two cities figure in the list of top FinTech funding receiving centres.
Results of city-wise trends on funding raised in first quarter of 2024, released by Tracxn, claiming to be a leading market intelligence platform, showo that Bengaluru topped with $247 million and 44% of all funding received, followed by Mumbai ($194 million or 35%), Hyderabad ($75.0 million or 13%), Gurgaon ($19.7 million or 3%), and Surat – the only Gujarat city to figure in Tracxn’s list of cities -- ($5.0 million or 1%).
Offering a comparison of the first quarter of 2024 with the quarterly performance of since Q2 of 2022, the report also indicates that the FinTech startup ecosystem has failed to catch up with the high investment trend witnessed in 2022. Thus, the Q1 2024 result worked out by Tracxn shows that the FinTech sector received a total investment of $550.8 million as against a whopping $1.3 billion in Q1 of 2023.

The trend suggests a sharp downfall over the period for which data has been released: Thus, the Q4 of 2023 received $346.7 million as against $537.4 million in Q4 of 2022; Q3 of 2023 received $476.6 million as against $973.4 million in Q3 of 2022; and Q2 of 2023 received $138.5 million as against $1.6 billion in Q2 of 2022.

Yet, ironically, the report seeks to heap praise the Indian economy, which it says “showed a strong performance in the previous quarter with a growth of 8.4%.” Agreeing that the “this number is expected to decline to 5.9% in Q1 2024 as per government sources”, it insists, “The Government of India has always been focused on promoting the tech ecosystem in the country.”
The declining trend in the funding of the FinTech startup ecosystem has come despite “the announcement of the Startup India Initiative in 2016”, which came up with “multiple schemes and initiatives have been introduced to boost the growth of India’s startup ecosystem”, to quote from the report. Thus, “Around $12 billion was allocated in the Interim Budget for 2024 for providing interest-free loans for 50 years to promote R&D in the private sector in the country.”

The report quotes the IMF to say that India is “expected to become the third-largest economy in the world by 2027 with a GDP of over $5 trillion”, and “with a large consumer base comprising the world’s largest young population and rising urban incomes, India is set to see good growth in the coming years.”

It adds, “FinTech has consistently been one of the top funded sectors in the country. Increasing smartphone penetration, the push towards a cashless economy, and other favourable regulatory policies have helped the sector receive consistent investor interest.”

Making a comparison of funding in Q1 of 2024 and Q4 of 2023 instead of Q1 of 2023, the report says, “Banking Tech, the third-highest funded sector, received funding of $85.8 million in Q1 2024, which is a growth of 187% compared to the $29.9 million in funding witnessed in Q4 2023, benefiting substantially from record-breaking UPI transactions and digital banking’s widespread adoption due to rising internet and mobile device penetration in cities and rural areas.”

However, this comparison, which many would consider incomparable (as the compared periods do not match), also shows that, to quote from the report, “Q1 2024 witnessed a significant 75% drop in seed-stage funding, which was at $9.9 million compared to $39.2 million in the previous quarter. Early-stage funding saw a 35% drop from $227 million raised in Q4 2023 to $147 million in Q1 2024. Only late-stage funding rounds witnessed a phenomenal rise of 392% to $394 million, compared to $80.1 million in Q4 2023.”

Comments

Dr (Col) Amitav Banerjee said…

All that glitters is not gold. Regrettably, glitter is valued more by most people today!

May 04, 2024

Grueling summer ahead: Cuttack’s alarming health trends and what they mean for Odisha

By Sudhansu R Das The preparation to face the summer should begin early in Odisha. People in the state endure long, grueling summer months starting from mid-February and extending until the end of October. This prolonged heat adversely affects productivity, causes deaths and diseases, and impacts agriculture, tourism and the unorganized sector. The social, economic and cultural life of the state remains severely disrupted during the peak heat months.

Stronger India–Russia partnership highlights a missed energy breakthrough

By N.S. Venkataraman* The recent visit of Russian President Vladimir Putin to India was widely publicized across several countries and has attracted significant global attention. The warmth with which Mr. Putin was received by Prime Minister Narendra Modi was particularly noted, prompting policy planners worldwide to examine the implications of this cordial relationship for the global economy and political climate. India–Russia relations have stood on a strong foundation for decades and have consistently withstood geopolitical shifts. This is in marked contrast to India’s ties with the United States, which have experienced fluctuations under different U.S. administrations.

From natural farming to fair prices: Young entrepreneurs show a new path

By Bharat Dogra There have been frequent debates on agro-business companies not showing adequate concern for the livelihoods of small farmers. Farmers’ unions have often protested—generally with good reason—that while they do not receive fair returns despite high risks and hard work, corporate interests that merely process the crops produced by farmers earn disproportionately high profits. Hence, there is a growing demand for alternative models of agro-business development that demonstrate genuine commitment to protecting farmer livelihoods.

The Vande Mataram debate and the politics of manufactured controversy

By Vidya Bhushan Rawat* The recent Vande Mataram debate in Parliament was never meant to foster genuine dialogue. Each political party spoke past the other, addressing its own constituency, ensuring that clips went viral rather than contributing to meaningful deliberation. The objective was clear: to construct a Hindutva narrative ahead of the Bengal elections. Predictably, the Lok Sabha will likely expunge the opposition’s “controversial” remarks while retaining blatant inaccuracies voiced by ministers and ruling-party members. The BJP has mastered the art of inserting distortions into parliamentary records to provide them with a veneer of historical legitimacy.

A comrade in culture and controversy: Yao Wenyuan’s revolutionary legacy

By Harsh Thakor* This year marks two important anniversaries in Chinese revolutionary history—the 20th death anniversary of Yao Wenyuan, and the 50th anniversary of his seminal essay "On the Social Basis of the Lin Biao Anti-Party Clique". These milestones invite reflection on the man whose pen ignited the first sparks of the Great Proletarian Cultural Revolution and whose sharp ideological interventions left an indelible imprint on the political and cultural landscape of socialist China.

The cost of being Indian: How inequality and market logic redefine rights

By Vikas Gupta We, the people of India, are engaged in a daily tryst—read: struggle—for basic human rights. For the seemingly well-to-do, the wish list includes constant water supply, clean air, safe roads, punctual public transportation, and crime-free neighbourhoods. For those further down the ladder, the struggle is starker: food that fills the stomach, water that doesn’t sicken, medicines that don’t kill, houses that don’t flood, habitats at safe distances from polluted streams or garbage piles, and exploitation-free environments in the public institutions they are compelled to navigate.

Why India must urgently strengthen its policies for an ageing population

By Bharat Dogra A quiet but far-reaching demographic transformation is reshaping much of the world. As life expectancy rises and birth rates fall, societies are witnessing a rapid increase in the proportion of older people. This shift has profound implications for public policy, and the need to strengthen frameworks for healthy and secure ageing has never been more urgent. India is among the countries where these pressures will intensify most sharply in the coming decades.

Thota Sitaramaiah: An internal pillar of an underground organisation

By Harsh Thakor* Thota Sitaramaiah was regarded within his circles as an example of the many individuals whose work in various underground movements remained largely unknown to the wider public. While some leaders become visible through organisational roles or media attention, many others contribute quietly, without public recognition. Sitaramaiah was considered one such figure. He passed away on December 8, 2025, at the age of 65.

New RTI draft rules inspired by citizen-unfriendly, overtly bureaucratic approach

By Venkatesh Nayak* The Department of Personnel and Training , Government of India has invited comments on a new set of Draft Rules (available in English only) to implement The Right to Information Act, 2005 . The RTI Rules were last amended in 2012 after a long period of consultation with various stakeholders. The Government’s move to put the draft RTI Rules out for people’s comments and suggestions for change is a welcome continuation of the tradition of public consultation. Positive aspects of the Draft RTI Rules While 60-65% of the Draft RTI Rules repeat the content of the 2012 RTI Rules, some new aspects deserve appreciation as they clarify the manner of implementation of key provisions of the RTI Act. These are: Provisions for dealing with non-compliance of the orders and directives of the Central Information Commission (CIC) by public authorities- this was missing in the 2012 RTI Rules. Non-compliance is increasingly becoming a major problem- two of my non-compliance cases are...

Search This Blog