This week saw a significant deceleration in funding in the Indian startup ecosystem. The week also came with 22 startups successfully raising approximately $113.39 million against $261.21 million in the previous week, thereby showing a fall of 56.6%. This is the lowest weekly funding seen within the past 15 weeks. The average funding over the last eight weeks was $323 million for 27 deals per week.
PC: LatestLY
Breakdown of Funding Rounds
Funding rounds break-up: 5 growth-stage deals worth $49.3 mn, 8 early-stage deals worth $64.09 mn, and 9 early-stage startups where funding amount was not disclosed.
Notable growth-stage deals included Rays Power at $15.1 mn, Auxilo at $12 mn, and NeoGrowth at $11.2 mn. Ather Energy at $7 mn, Neo at $4 mn. Among early-stage startups, Unimech Aerospace led the pack, followed by Stable Money and Incuspaze.
Sector and Geographic Distribution
Agritech and Fintech dominated the space with four deals each, while E-commerce, Manufacturing, and Proptech together closed a similar number of deals. Mumbai-based startups took the lead with six deals, while Delhi-NCR and Bengaluru followed at a close second.
Funding Series Analysis
The pre-Seed, Seed, and Series A funding rounds all received an equal 5 deals. Apart from these, 3 Debt deals and 1 each of Angel, pre-Series A, Series B, and Series C rounds were witnessed.
Notable Developments
- Fund Launches: India Accelerator launched a new vertical for cleantech startups, while the Fashion Entrepreneur Fund received investments from prominent figures.
- ESOP Buyback: Adda247 announced its share buyback from over 130 employees at 40 times the initial purchase price.
- Key Hirings: Ecom Express, Swiggy Instamart, and Drive FITT have made big-ticket leadership appointments.
- Mergers and Acquisitions: Some of the notable acquisitions include the deal between Riveron-Yantra, Thyrocare’s acquisition of Polo Labs, and Acko’s acquisition of OneCare.
- Potential Deals: Multiple startups such as Kazam, Wingreens Farms, and Glance are closing sizable funding rounds.
New Launches and Partnerships
ElectricPe partnered with Google to add EV charging stations across India on Google Maps, while CRED launched its money management platform, CRED Money.
Financial Results
Some of the notable financial results included:
- Go Digit’s revenue decline but 90% profit increase in Q1 FY25
- Waycool’s Rs 1,251 Cr revenue and Rs 686 Cr loss in FY23
- Urban Company’s claimed Rs 827 Cr revenue in FY24 with a 70% reduction in losses
Regulatory and Policy Updates
Within a moment, the government of India has come up with various steps that impacted startups. These include the abolition of angel tax for all investors, support for MSMEs, easing the rules on FDI, and revising the tax regime.
Conclusion
Though the Indian startup ecosystem had a tough week in terms of funding, the landscape is still dynamic in terms of new fund launches, strategic acquisitions, and changes in policy; all this will continue spurring growth. The coming weeks shall be real determinants as to whether this was just a mere blip or, on the other hand, indicative of a broader trend likely to be witnessed in the funding cycles of the Indian startup ecosystem.
