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Fintech startups in India raised $5.65 billion in 390 rounds last year, a massive drop of 47 per cent in terms of funding amount and 29 per cent in the number of rounds when compared with 2021, a report showed on Thursday.

This drop in funding can be attributed to the decline in late-stage funding from $8.3 billion in 2021 to $3.7 billion in 2022, a drop of 56 per cent, according to data provided by global software-as-a-service (SaaS)-based market intelligence platform Tracxn.

Fintech startups recorded 13 funding rounds of $100 million+ in value. This is a massive drop of 50 per cent, from 26 rounds in 2021.

Y Combinator, Tiger Global Management and Lets Venture were the most active investors in the space, with more than 20 investments in 2022.

Only four startups in India's fintech sector received unicorn status in 2022, far lower compared with 13 new Unicorns in 2021, said the report.

Among the cities, fintech companies in the Delhi-NCR region (Delhi, Noida and Gurugram) have raised a combined funding of $14.9 billion till date, followed by Bengaluru ($10.2 billion) and Mumbai ($4.2 billion).

India is still the third-highest funded country in terms of funding received in the fintech sector, only behind the US and the UK, said the report.

"The country is currently experiencing a funding winter. Growing inflation and macroeconomic tensions have made the investors step back from making big investment decisions," the findings showed.