Weekly Musings – Big start-up updates for the week to December 01, 2023

4 Dec 2023 , 07:39 AM

Compared to the previous week, the current week saw flows into start-ups that were absolutely flat, although the number of deals were higher at 19. For the week to December 01, 2023, the start-up funding at $62 million was at par with the previous week at $61 million. In fact, when compared to the average of the last 5 weeks, the start-up funding in the latest week was lower by a full 64.2%, as can be seen from the table below. Here is the story of start-up fund raising over the last 6 weeks in numbers.

Funding Week	Start-up funding raised
Week ending October 27, 2023	$466 million
Week ending November 03, 2023	$133 million
Week ending November 10, 2023	$159 million
Week ending November 17, 2023	$44 million
Week ending November 24, 2023	$61 million
Average of previous 5 weeks	$173 million
Week ending December 01, 2023	$62 million

The start-up funding for the latest week ended December 01, 2023 was flat on a week-on-week basis but sharply lower than the average of the last 5 weeks. That could be because the week to October 27, 2023 was largely skewed by the mega funding deal of Ola Electric. The latest week funding flows were led by E-Motorad, Innovist, Zyla, and PhiCommerce; among others; across a total of 19 deals. Let us now move to the actually break-up of the start-up funding in the latest week.

Week was dominated by the E-Motorad funding at $20 million

The week to December 01, 2023 was largely dominated by the funding of $20 million raised by E-Motorad; a maker of smart electric bicycles. E-Motorad is an electrical vehicles (EV) start-up and the funds were raised as part of its Series-B funding round. The funding round was led by Panthera Growth Partners with participation from Alteria Capital, Xto10X Technologies and Green Frontier Capital, which is already an investor in E-Motorad. 

Till date, E-Motorad has sold more than 80,000 such bikes across the global markets and it has generated revenues of $36 million from the sale of these bikes. The fresh fund kitty of $20 million will be used by E-Motorad to boost its manufacturing capabilities, deepen its offline presence with point-of-sale stores and to test and launch technologically enhanced smart electric bicycles in the domestic and also in the global markets. The company will also be using these funds to prise open new markets and to enhance its technology stack. 

Payment solution, PhiCommerce, gets $10 million kitty

PhiCommerce is one of the leading payment solutions provider and the funding of $10 million has been raised from BEENEXT, which also happens to be an existing investor in PhiCommerce. In addition, Opus Ventures has also participated in this $10 million funding round. This $10 million or Rs83 crore raised by PhiCommerce is part of its Series A1 funding round and with the company already having raised $5 million in the past, this takes its total funding level to $15 million.

How does the company plan to use the fresh funds? PhiCommerce will use the fresh capital raised to expand its global footprint and also invest in its technology stack. More specifically, the company will use the funds to build innovative solutions to further scale up its payment solutions ecosystem in order to make it a globally robust platform. PhiCommerce has already clocked operating revenues of Rs27.5 crore in FY22, the last fiscal year for which financial data has been reported. Between FY21 and FY22, the revenues of the company jumped by nearly 6-fold, albeit on a very small base.

Innovist raises $7 million from Amazon Venture

Innovist, the parent of Bare Anatomy, has raised funding of $7 million from Amazon Smbhav Venture Fund. Apart from Amazon, other participants in the funding round included  72 Ventures and the family office of Falguni Nayyar and Sanjay Nayyar (of Nykaa). Innovist owns three direct to consumer (D2C) brands viz, Bare Anatomy, Chemist at Play and SunScoop. It will use the funds for product innovation, market expansion and for expanding its manpower stack. In the past, Innovist has already raised close to $6 million from investors like Accel Partners and 72 Ventures. This will be part of their Series-A round of funding. 

GrowXCD bags funding of $6 million to expand SME stack

In another round of key funding, GrowXCD has raised $6 million or approximately Rs50 crore to provide credit to MSMEs and also to low income households. Currently, GrowXCD offers two products for its customers. While the GrowShubam is targeted at low income households, the GrowVyapar is focused on MSMEs not having access to traditional funding sources. The company plans to use the capital to build its team, invest in technological innovation and for expanding its presence across India over the next 12-18 months. GrowXCD had already received the NBFC license from the RBI and wants to expand beyond its current presence which is limited to just six branch offices in the state of Tamil Nadu. Lending to the marginalized segments of retail and wholesale segment is intrinsically high risk, but with adequate risk management, it can be a potentially good proposition.

Zyla Health and Corover raise $4 million funding each during the week

In two other interesting deals, Zyla Health and Corover raised $4 million each of funding. Let us talk about Zyla Health first. It has raised $4 million to offer personalized solutions to chronic patients. It was a Series A funding round led by Exfinity Venture Partners with participation from Sony Innovation Fund, Venture Catalysts and Aureolis Ventures. Zyla Health will use the funds to scale up growth across insurance, corporates, and pharmaceuticals. Zyla is a B2B start-up and among its key clients are Max Life Insurance, HDFC Ergo, Pfizer, Zydus, IBM, DHL, and Godrej. 

In another key funding round, Corover bagged $4 million from Google. Apart from Google, this AI start-up, Corover, also has the backing of CanBank Venture Fund, Lead Angels, Cognify and IIIT-Delhi. Google is more of a strategic partner and also offers it credit to access its cloud computing. Corover specializes in conversational artificial intelligence (AI). There is the launch of Bharat GPT that is expected soon and the funding is likely to coincide with the launch of this offshoot of GPT.

Other key funding deals in the week to December 01, 2023

For the week ended December 01, 2023 other start-ups also saw smaller levels of funding. Here are three such cases of funding in the week.

1. Hospitality start-up, Elivaas, has raised $2.5 million from Peak XV as part of the seed funding round. Elivaas is a tech driven villa and luxury apartment management platform that allows owners to monetize and maintain their vacation homes in India. They plan to use the funds to expand the market and to scale up the technology stack.

    

2. Frendy, the retail store network, has bagged a sum of $2 million from Desai Ventures with participation from Auxano Capital, AT Capital Singapore and Metara Ventures. The fresh funds will be used by Frendy to expand its technology footprint, expand its store presence and also the private label portfolio. Frendy offers an app for customers to order products online and the last mile delivery is handled through Kirana stores.

    

3. Twyn has bagged $1.25 million to help enterprises set up smart factories. The funding round was led by JITO Incubation and Innovation Foundation with participation from HEM Angels, Bestvantage and Beej Networks. It will offer its smart factory solutions to companies in the automobile, petrochemicals, and steel hubs. It also looks to expand its presence in the Middle East and in Europe. 

    

4. HempStreet has raised $1 million to launch new Ayurveda Cannabis Medication. It is a Pre-Series-A round of funding from Carl Waahlin. HempStreet will deploy the funds to expand its product range, enhance clinical trials for proprietary formulations and to set up a footprint in the global markets. The cannabis Ayurvedic medicines are used to treat digestive ailments, menstrual cramps, sexual health, hypertension, and anxiety.

Finally, in a side note, global PE investor, Prosus, has written down the enterprise value of Byju’s to below $3 billion, which is a substantial downgrade from its earlier peak valuations of $22 billion assigned to Byju’s. Clearly, the plethora of problems on the disclosure and financial side are not helping the company too much.