UPI ecosystem funding hits $5.8 billion since 2021, top five take 66%

Over their lifetimes, the 10 best-funded companies in the ecosystem have raised about $9.4 billion. Paytm leads with $2.8 billion, followed by PhonePe at $1.7 billion and CRED at $1.5 billion.

The ecosystem is showing signs of maturity through exits and consolidation. Since 2021, payments companies have recorded eight IPOs and 25 acquisitions. Public market exits include Paytm, Pine Labs, MobiKwik and Zaggle. Larger funded companies are increasingly becoming acquirers. Razorpay has acquired Ezetap and IZealiant. Pine Labs has acquired Setu and Mosambee. M2P, Juspay, PayU and Perfios have also pursued acquisitions to add capabilities, indicating consolidation around larger full-stack platforms, the report said.

Tracxn highlighted UPI's growing international footprint. Cross-border UPI transactions rose more than 20-fold from about 37,060 in FY24 to over 7.5 lakh in FY25. The payment rail is now live in more than 12 countries.

The next phase will also depend on how the UPI ecosystem is funded, the report said. While UPI itself has created a large transaction base, private capital has financed products and capabilities around the rail, including credit-on-UPI, cross-border payments and fraud prevention. Tracxn said the sustainability of both the public payment rail and the commercial ecosystem around it will be critical to the next phase of growth.