New Delhi, April 27 -- Early-stage fintech investors in India are shifting away from consumer-facing models that are heavily regulated and pivoting to software and infrastructure businesses that promise steady growth with minimal policy risk.

Funds are increasingly backing software, infrastructure and B2B fintech models with AI that are less exposed to regulatory shocks, experts said.

The shift follows a reset between 2021 and 2025, when tighter rules on digital lending, first-loss default guarantees and data governance curbed growth and raised compliance costs, pushing investors to favour B2B models over balance-sheet lenders.

Data from Tracxn over the last 24 months showed that investors are becoming more selective within fintech, wi...