Springboard 2026 | Fintech after the freeze: Where investors are placing their 2026 bets

As 2025—a year marked by global volatility and regulatory tightening—came to an end, fintech investors in India turned far more selective. Capital didn’t disappear, but clustered around a few proven models, leaving large parts of the sector starved of funding.

Continued regulatory tightening in unsecured credit, coupled with deteriorating collection trends at some consumer lenders, pushed investors toward secured models such as affordable housing and micro, small and medium enterprise (MSME) financing.

At the same time, sustained systematic investment plan (SIP) inflows, rising demat account additions and expanding mutual fund assets under management translated into visible revenues for wealth platforms, drawing investor interest.

Overall funding into Indian fintech stood at $2.82 billion across 134 deals in 2025 till the first week of December, broadly steady compared with $2.51 billion across 163 deals in 2024, according to Venture Intelligence.

Wealthtech surge

Wealthtech emerged as the clear winner, with funding jumping to $547 million in 2025 year-to-date, from $153 million in 2024.

“The first wave of financialization was about access. Now people want better performance," said Manasi Shah, an investor at Accel, who focuses on fintech investments. “This year, India’s financialization of wealth played out very clearly."

Platforms such as Neo Wealth, Dezerv and Sahi raised growth-stage funding, while Groww—one of India’s largest wealth platforms—went public, raising ₹6,600 crore.

“As the market matures and wealth creation in India increases, there is growing interest in non-lending segments—primarily wealth management," said Anshul Agarwal, managing director and head, Avendus Investment Banking.

Lending, redefined

Lending remained the largest fintech segment by capital deployed—but with a sharp pivot in preference.

Funding for unsecured lenders slowed significantly, prompting players such as KreditBee, Credila, Aye Finance, Fibe and MoneyView to explore public markets instead.

“Filing for an IPO doesn’t mean execution," Agarwal said. “Many companies are IPO-ready, but timing the market is a very different decision."

Overall lending funding fell to $752 million across 53 deals in 2025 YTD, down from $1.53 billion across 69 deals in 2024.

Investors, Agarwal said, are now more comfortable backing secured credit at lower valuation multiples, reflecting asset-quality concerns and a cyclical downturn.

Housing and MSME lending emerged as the strongest themes, with companies such as Credit Wise Capital, Saarthi Finance, LoanTap and CredRight raising MSME-focused capital, while Ummeed Housing Finance and Weaver Services drew interest in housing finance.

Even unsecured lenders began diversifying. Kissht entered loan-against-property, while Fibe expanded into impact lending.

Payments paradox

Payments once again attracted the single largest share of funding, raising $1.06 billion across 22 deals, though the number was skewed by PhonePe’s $600 million round led by General Atlantic.

Beyond scaled platforms, pure-play payments infrastructure struggled to attract capital as investors prioritized profitability.

Shah noted that companies combining UPI with lending products, especially credit cards, attracted strong interest.

“UPI combined with credit cards is an interesting new form factor, and companies operating in that space have done well," said Shah.

However, as banks stepped up technology modernization, moving away from legacy systems toward cloud-native, API-led platforms, the demand for core banking software, cybersecurity, payments infrastructure, and compliance tools increased.

According to Ramki Gaddipati, co-founder and chief technology officer at Zeta, investor interest has been strongest in technologies that have a clear impact on bank economics. Zeta raised $50 million in a Series D round in 2025.

“Where startups demonstrate measurable outcomes (reduced fraud, faster launches, improved approval rates), investor appetite is disproportionately strong," he added.

These include payments rails, banking infrastructure, AI-driven fraud detection, and faster servicing, approved underwriting and regulatory technology.

What investors are watching next

Even as capital remains cautious, investors are tracking newer models adjacent to core lending and wealth, especially in personal finance and credit advisory.

Shah pointed to AI-led financial advice as an emerging theme. “We’re all using GPT today for advice in some form. The real question is whether you can build a financial advisory platform that is deeply personalized," she said.

Credit score improvement and financial wellness apps are also gaining attention as stress in unsecured lending pushes borrowers to manage credit more actively.

“Credit improvement is often the wedge," Shah said. “Once you have the customer, you can expand into advisory, wealth and personal finance."

Agarwal expects consolidation to follow as capital tightens. “Financial services has historically consolidated slowly, but that could change over the next two to three years," he said.