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

Land under siege: A silent crisis, desertification is threatening India’s future

By Raj Kumar Sinha* Desertification is emerging as one of the gravest environmental challenges of our time. Marked annually on June 17, the World Day to Combat Desertification and Drought reminds us that the fate of our planet’s land—and the billions who depend on it—is hanging in the balance.

Hyderabad protest demands end to Operation Kagar as senior Maoist leaders killed in encounter

By Harsh Thakor* A protest was held on June 17 at Indira Park in Hyderabad by the Shanti Charchala Committee, calling for an end to Operation Kagar and the start of peace talks with Maoist groups. The event brought together representatives from several political parties and civil society organizations. Among those who addressed the gathering were CPI (ML) New Democracy Central Committee member Vemulapalli Venkatramayya, along with leaders from the Congress, BRS, CPI, CPM, Telangana Janasamithi, MCPI, SUCI, CPI ML, RSP, and VCK. The programme also featured performances by cultural groups such as CLC, HRF, TVV, Arunodaya, Praja Kala Mandali, and Praja Natya Mandali. Public figures including actors Narayana Murthy and Tudundebba Upendar and academics like Professor Anver Khan and Professor Vinayaka Reddy participated as speakers.

Madhya Pradesh village's inspiring example of how small budget effort conserves water amidst heat wave

By Bharat Dogra Heat waves have been intensifying over vast areas of India in recent days and there are also many reports of water scarcity making the conditions worse for people. However the situation can differ significantly in various villages depending on whether or not significant water conservation efforts have been made. In recent years I have visited several villages of good water conservation efforts where I noticed that even at the time of adverse weather conditions, people of these villages as well as farm and other animals feel important relief in terms of access to adequate water. Due to water and moisture conservation, conditions of farms and pastures is also much better. What is more, with the participation and involvement of people, even quite low budgets have been utilized well to achieve very useful and durable results.

Central London discussion to spotlight LGBTQ+ ex-Muslim rights and persecution

By A Representative On June 13, 2025, the Dissident Club in Central London will host a public discussion to mark the 18th anniversary of the Council of Ex-Muslims of Britain (CEMB) and to commemorate World Refugee Day. The event, scheduled from 7:00 to 9:00 pm, will feature speakers Ali Malik, Maryam Namazie, and Taha Siddiqui, who are expected to address the intersecting challenges faced by LGBTQ+ ex-Muslims globally.

Population explosion: India needs a clear-headed policy, data-driven governance, long-term planning

By N.S. Venkataraman* At the upcoming G7 summit in Canada, Prime Minister Narendra Modi has been invited as a special guest, with Canadian Prime Minister Justin Trudeau citing two main reasons: India’s rise as the world’s fifth-largest economy and its status as the most populous nation. While economic growth is undoubtedly a point of pride, the latter distinction—India’s population—raises an important question: should this be seen as a strength or a source of growing concern? India has not conducted a national census since 2011, leaving the current population figures largely speculative. Estimates place the population at around 1.4 billion, with projections reaching 1.8 billion by 2050. Despite modest declines in fertility and death rates, the annual population growth remains between 1.5% and 2%. The next census, scheduled for 2026, will provide a more accurate demographic picture, but until then, policymaking remains uninformed by crucial data. Over the past eleven years, the gov...

Victim to cricketing politics, Alvin Kalicharan was a most organized left handed batsman

By Harsh Thakor* On March 21st Alvin Kalicharan celebrates his 75th birthday. Sadly, his exploits have been forgotten or overlooked. Arguably no left handed batsman was technically sounder or more organized than this little man. Kalicharan was classed as a left-handed version of Rohan Kanhai. Possibly no left-handed batsmen to such a degree blend technical perfection with artistry and power.

Exploring 'Volokolamsk Highway': A tale of Soviet heroism and resilience

By Harsh Thakor* "Volokolamsk Highway" is a classical war novel by Alexander Bek, first published in Russian in 1944 and translated into English in 1958. Set during WWII on the Eastern Front, it describes critical battles fought by the Soviet Red Army against Nazi forces advancing toward Moscow in October 1941. Republished by Foreign Languages Press in 2023, the novel offers a vivid portrayal of Soviet soldiers' struggles to defeat fascism. It is recommended for those seeking insight into Soviet heroism during World War II.

Better halves lead the way as organic farmers, entrepreneurs and social reformers

By Bharat Dogra Two major challenges continue to limit the full participation of rural women in development. First, their crucial roles, potential, and capabilities often remain underrecognized. Second, even when women are encouraged to take on broader responsibilities, the overarching development models may not align with their needs or perspectives and may even appear counterproductive. Under such conditions, it is unrealistic to expect women to engage as enthusiastic and creative participants.

Citizens demand judicial probe into Ahmedabad plane crash, cite neglect of intern doctors, victims' families

By A Representative A wide coalition of concerned citizens, academics, medical professionals, social activists, and public intellectuals has submitted a petition to the Prime Minister of India demanding an urgent judicial inquiry into the recent tragic airplane crash in Ahmedabad that claimed over 240 lives. The petition, coordinated by the Movement for Secular Democracy (MSD), calls for a high-level judicial committee, headed by a retired High Court justice and comprising eminent citizens, to investigate the incident beyond the scope of the existing technical committee.

Search This Blog