The third week of March saw a surprise for the Indian startup ecosystem with a steep drop in venture capital (VC) funding, largely due to a noticeable absence of significant deals during this period.
The week saw total VC funding of $110 million across 25 deals. In contrast, the previous week saw this number at $412 million. This is a surprising drop as there was a steady increase in capital inflow over the last three weeks.
During the week, the early stage category of funding raised the highest amount of capital followed by the growth category.
This steep drop in VC funding also reveals the challenges that the Indian startups continue to face in raising capital. There is a certain degree of uncertainty and volatility in the macroeconomic environment which is impacting the fund flow.
It is unlikely that these challenges will go away anytime soon and startups will need to wade through these tough times. According to industry observers, even VC funds, especially those who are of smaller size, will struggle to raise fresh capital.
On the other hand, the startup ecosystem continues to witness interesting developments. Edtech unicorn Physicswallah has filed its draft IPO papers. Hero Motocorp continues to expand its reach in the EV ecosystem by acquiring a significant stake in Euler Motors. Fintech company PayU has acquired a 43.5% stake in Mindgate Solutions.
At the same time, the VC community continues with the launch of new funds and this week saw All In Capital announcing a new fund.
Key transactions
D2C brand Pilgrim raised Rs 200 crore ($23 million approximately) from Vertex Growth Fund, Anicut Equity Continuum Fund and Narotam Sekhsaria Family Office.
Cybersecurity startup Protectt.ai raised Rs 76 crore ($8.7 million approximately) led by Bessemer Venture Partners.
Servify raised Rs 66.27 crore ($7.7 million) from BEE Accelerate Fund2 PTE Ltd, and Singularity Growth Opportunities Fund I and Singularity Equity Fund I.
Fashion delivery platform Slikk Club raised $3.2 million from Lightspeed, Multiply Ventures and angel investors.
Chai Kings, a Chennai-based chai retail chain, raised $3 Million from A.V. Thomas and Co.
