Three points you will get to know in this article:
- Indian startups saw a surge in investments in October, with $1.24 billion raised by 95 startups.
- Ola Electric, Zetwerk, and Zolve were among the top companies securing funding, with Ola Electric raising $240 million in debt financing.
- Bengaluru led the funding charge, followed by Delhi-NCR, with the e-commerce and fintech sectors dominating the investment landscape.
October witnessed a promising surge in investments for Indian startups, aligning with historical patterns. This noteworthy uptick in monthly financial support arrives just as startups within the ecosystem are rallying to navigate through the challenges of funding constraints. Notably, an intriguing aspect is that a substantial one-third of the total funding in the previous month was attributed to debt financing.
According to findings from TheKredible, a startup intelligence platform, a whopping $1.24 billion has been amassed by 95 startups in the month of October. This impressive figure comprises a substantial $1 billion injected into the growth-stage endeavors, with 24 startups benefiting, while the early-stage ventures managed to secure nearly $200 million. It’s worth noting that details of transactions for 11 startups remain undisclosed, adding an element of intrigue to the funding landscape.
Following a three-month dip, where monthly funding for Indian startups fell below the $1 billion mark (from June through August), there’s been a remarkable turnaround. Now, for two consecutive months, these startups have notched up funding exceeding $1 billion. October stands out as the second-highest funding month in 2023, trailing only behind the $1.3 billion in March. What’s intriguing is that the funding landscape in October 2023 mirrors that of the same month in the previous year, October 2022.
Once more, Ola Electric takes the lead by securing a substantial $240 million debt injection from the State Bank of India. This brings the company’s total funds raised to an impressive sum exceeding $380 million, encompassing a noteworthy $140 million raised in the previous round in September. Noteworthy achievements were also marked by Zetwerk and Zolve, as they successfully secured funding of $120 million and $100 million, respectively.
Mamaearth’s umbrella company successfully garnered $91 million in a pre-IPO phase, and the limelight extended to InsuranceDekho, the insurance tech startup, securing a noteworthy spot in the top five by securing a substantial $60 million in their Series B funding. In an impressive feat for InsuranceDekho, they distinguished themselves by achieving the rare milestone of securing two funding rounds within the span of 2023. Their initial triumph was a $150 million Series A funding round, which unfolded back in February this year.
Adding to the narrative of financial maneuvers, alongside Ola Electric and Zolve, Mensa Brands opted for a strategic move by raising funds through debt, solidifying its position among the thriving growth-stage companies.
In October, just like the growth stage, early-stage deals were also spearheaded by debt funding. An impressive example of this trend is Krutrim SI Designs, the brainchild of Ola founder Bhavish Aggarwal, which secured a substantial $24 million in debt funding from Matrix Partners. Joining the ranks of top performers were Vridhi Home Finance, a tech-driven housing finance company, the gold loan startup Oro, Healthtech maven Sugar.fit, and the direct-to-consumer footwear sensation Inc.5. Each of these ventures clinched funding surpassing the noteworthy $10 million mark. Dive into TheKredible for an in-depth exploration of additional details and the comprehensive database.
In the vibrant month of October, the seed stage witnessed a bustling 30 deals, while the pre-Series A and Series A stages secured 14 and 11 deals, respectively. Further down the entrepreneurial journey, we observed 9 Series B endeavors, 7 pre-seed ventures, and 5 debt deals making waves. The later stages, Series D, Series E, and Series F, boasted 2, 2, and 1 deal(s) respectively.
Zooming in on the cityscape, Bengaluru stole the spotlight with a whopping 39 deals, spearheading the funding charge with over 60%, tallying up to a remarkable $753 million. Delhi-NCR wasn’t far behind, securing $254.8 million across 21 dynamic deals. Mumbai, Chennai, and Hyderabad also contributed to the entrepreneurial symphony with 17, 7, and 4 deals respectively.
When it comes to sector supremacy, the E-commerce realm reigned supreme, notching up 17 deals and a substantial $355 million, closely trailed by the fintech marvels, pocketing an impressive $248 million through 15 deals.
In October, the startup landscape witnessed a notable decline in M&A activities, with just 7 deals making the headlines. Among these, three unicorns – Slice, Dreamil, and Lenskart – stole the spotlight. In an intriguing move, fintech player Slice joined forces with North East Small Finance Bank, while Dreamll successfully acquired Sixer, and Lenskart assumed full control over TangoEye. For a detailed list of these exciting developments, you can check out TheKredible.
In the realm of flourishing financial currents, nine investment firms dedicated to fostering startups, spanning the realms of venture capital and debt enterprises, have recently unveiled their successful fundraising endeavors. Leading the charge is Flourish Ventures, boasting an impressive $350 million global fund. This powerhouse has previously championed Indian startups such as Indifi and ApnaKlub.
ValuAble, a standout venture firm, has also thrown its hat into the fundraising arena, revealing its inaugural fund with a substantial $100 million backing. The roster extends to include notable names like Incred, Singularity, and the newly minted fund by Paytm founder Vijay Shekhar Sharma, which zeroes in on the realms of Electric Vehicles (EV) and Artificial Intelligence (AI).
October’s financial landscape not only witnessed a surge in funding but also marked a downturn in layoffs compared to preceding months. According to insights compiled by TheKredible, approximately 500 employees faced the unfortunate reality of job cuts during October. Among them, Edtech trailblazer Adda247 stood out, parting ways with 250-300 team members, closely followed by CityMall, Bizongo, and Graphy.
This dynamic shift in the financial tides signals a robust period for startup investments, with key players strategically positioning themselves for success amid the evolving entrepreneurial landscape. In the bustling scene of October, it was Peak W Partners (including Surge), Inflection Point Ventures, along with the dynamic duo Abhijeet Pai and Nikhil Kamath, who took the lead in the race for the most active investors. Each of these powerhouses sealed the deal on four occasions, making waves in the investment landscape.
Following closely behind were the impressive trio of India Quotient, Matrix Partners, and Rainmatter Capital, adding their own flair to the list. Not to be outdone, Kunal Shah, the mastermind behind CRED, made his mark by backing three promising startups – Pep, Tap Invest, and Fresh Bus – during this vibrant period of entrepreneurial ventures. It’s indeed a symphony of strategic investments orchestrating the rhythm of innovation.
India’s startups currently favor established, growth-stage ventures, evident in frequent unicorn announcements and monthly funding surpassing a billion dollars. The focus on debt highlights the challenges for pre-revenue and early-stage startups. The cycle’s revival hinges on successful exits, exemplified by Mamaearth, or valuation markups for proven results. Anticipating a turnaround, we see various sectors, including agritech, infra, and fintech, poised for resurgence. Beyond global trends distancing from China, India’s domestic market improvement contributes to unexpectedly high growth rates. We expect this trend to persist, with equity contributions returning to a prominent position soon.
- Fino Payments Bank Appoints Rajat Kumar Jain as Part-Time Chairman Amid Digital Expansion - December 6, 2023
- Seafund Ventures into EV and Clean Mobility: Backs Five Deeptech Startups - December 5, 2023
- BYJU’S Responds to ED Show Cause Notices, Describes Them as Technical - December 4, 2023