Delhi NCR fintech funding slows as investors extend due diligence

Early-stage startup deal activity in India fell 43% in the first half of 2026, while venture due diligence timelines stretched from about 30 days to more than 90 days, according to Nanne Parmar, chief executive of Easemoney, writing on Finextra. Parmar said the shift has put company registration and compliance records under greater scrutiny for fintech founders in Delhi NCR and other Indian hubs.

The slowdown in deal count did not translate into a fall in aggregate capital. Parmar said Indian startup funding rose 12% to $7.2 billion in H1 2026, even as the number of funding rounds dropped from 1,149 to 652. The pattern points to capital being concentrated in fewer companies, with investors taking longer to review legal structure, ownership records and governance documents before closing transactions.

Delhi NCR remained India’s third-largest funded startup hub in the period, drawing ₹9,495 crore, or about $1.14 billion, across 148 deals, according to Parmar. Bengaluru led with ₹36,632 crore, or $4.4 billion, from 287 deals, followed by Mumbai with ₹18,894 crore, or $2.27 billion.

Fintech remained a large share of the market. Parmar said Indian fintech companies raised ₹16,630 crore, or $2 billion, across 63 projects in H1 2026, representing about 26% of national startup funding. He also cited Delhi NCR’s longer-term fintech base, saying the region has 2,900 fintech companies that have attracted a cumulative ₹51,092 crore, or $6.15 billion, since 2014.

Compliance moves earlier in the funding process

Parmar said investors are increasingly seeking incorporation documents, cap table clarity, employee stock option planning and governance records earlier in the fundraising process. He said institutional investors commonly prefer Private Limited Companies because that structure can issue equity shares, support ESOPs and provide a clearer framework for corporate governance.

More than 90% of venture capital investments are made into Private Limited Companies, according to Parmar. He said founders that begin fundraising before completing incorporation, or that use proprietorship or LLP structures, can face delays if investors require a restructuring before closing.

The article also cited delays linked to PAN, TAN and DIN issuance, and said compliance issues discovered during extended diligence can add four to 12 weeks to fundraising timetables. Parmar said investors are paying particular attention to fintechs exposed to digital lending, co-lending and escrow arrangements, where banking partners may require a Corporate Identification Number and corporate PAN before providing sandbox or production API access under RBI digital lending rules.

SPICe+ centralises incorporation filings

Parmar pointed to the Ministry of Corporate Affairs’ SPICe+ system as the main incorporation route for companies seeking faster formalisation. Under the process he described, Part A covers name reservation, Part B covers incorporation filings as well as up to five DINs, PAN and TAN, and AGILE-PRO-S covers bank account opening and optional GST registration.

If documents are complete, most companies can be incorporated within two to three weeks through the integrated filing, according to Parmar. He also said EPFO and ESIC registration are optional during incorporation for eligible startups under current SPICe+ rules.

India’s wider startup base continues to expand, supported by digital public infrastructure and artificial intelligence activity, Parmar said. He cited more than 2.23 lakh DPIIT-recognised startups, over 120 unicorns and 23.36 lakh direct jobs created. The financing data, however, suggests investors are applying a higher threshold to early-stage companies, particularly in regulated fintech segments.

This story draws on original reporting from Finextra Research.