Weekly Musings – Big start-up updates for the week to July 07, 2023

10 Jul 2023 , 07:59 AM

This is more than twice the start-up funding in the week prior to that and there has finally been some momentum visible in the start-up funding space. Here is a quick rundown on the key start-up updates that defined the week to July 07, 2023.

Start-up funding bounces to $155 million in the week

For the week ended July 07, 2023 the start-ups saw fund raising of $155 million across a total of 15 deals on the street. That is a good 138% higher than the week prior to that, which just saw start-up funding of $65 million. Also, in the latest week, the $155 million was across just 15 deals showing much bigger ticket sizes and deal values. Now, it is over to the deals of the current week! 

In one of the biggest round of funding during the week, the Direct to Consumer (D2C) jewellery brand, GIVA, has bagged Rs270 crore funding in a round led by Premji Finvest. It is the family office of Azim Premji, the founder of the modern Wipro Ltd. Apart from Premji Finvest, existing investors in GIVA like Aditya Birla Ventures, Alteria Capital and A91 partners also participated in the funding. GIVA will use the funds to innovate and expand product categories in jewellery. It will also use the funds to expand its omnichannel presence by setting up of more offline stores. In another major deal, the study abroad platform, Leverage Edu, has raised $150 million. This Series-C round of funding was led by Princeton based Language Testing Conglomerate (ETS). Leverage Edu offers a counselling platform to give students a one-stop dashboard in their journey to international admissions.

SAAS firm KaarTech has raised $30 million from A91 Partners during the week. Chennai based KaarTech was founded in the year 2006 and is a digital transformation and consulting company. It provides IP and digital services in the SAP ecosystem. KaarTech will use the fresh funds to boost organic and inorganic growth across the Middle East, EU, and the US. In another round, Batter Smart (the EV start-up) has secured $30 million funding from Tiger Global and Blume Ventures. Battery Smart plans to add up to 100,000 customer to its network by the year 2025 using these funds. In another big deal this week, AI4 Bharat Researchers has raised $12 million in funding Peak XV and Lightspeed Ventures. The start-up will offer custom-made language models for India-centric use cases. AI4 Bharat has already launched mobile assistant easy access system for the government schemes in multiple languages for a seamless experience.

There were a number of smaller deals too in the start-up space. Smartstaff, the blue collar staffing platform, has raised $6.2 million funding from Nexus Ventures, Arkam Ventures and Blume Ventures in Series-A round of funding. Smartstaff will use these fresh funds to expand its geographical presence and scale up its business. Even the troubled Zest Money has raised up to $7 million during the week from Quona Capital, Zip and Omidyar Networks to give the company some respite after the Phone Pe deal fell through. In another deal in the EV space, high speed e-scooter start-up, Vegh, bagged $5 million in funding to expand its manufacturing capacity of its high-speed e-scooters from 60,000 to 180,000.

Finally, in other start-up funding news, Frigate has raised funding from Capital A and Java Capital to make manufacturing simpler for industrial OEMs. It will scale up its digital manufacturing ecosystem with these funds. ZuAI, the generative AI powered edtech start-up has also raised funding to offer more personalized learning experience. It plans to reach more than 100 million students in the next 3 years. To add to the start-up glamour quotient, former Indian cricket captain, Sourav Ganguly, has invested an undisclosed sum in food delivery start-up, JustMyRoots. It will use the funds to expand its in-house production and packaging solutions.

What about the funnel for such funding. In a significant deal, Varanium Capital announced the close of its Rs250 crore maiden venture debt fund. It will back about 100 start-ups via revenue backed financing and traditional venture debt. Even as the IPO of Ideaforge Technology was a big hit and got a 94% premium on listing, PharmEasy (which had shelved its IPO plans last year), plans to raise fresh equity from other sources through private placement. The valuation is likely to be downsized by about 10% in this round.

Big start-up strategies this week?

Here is a quick take on some of the key start-up strategies evidenced last week.

• In a move that was already known, Adani Digital Labs, part of Adani Enterprises, has bought 30% in Trainman, the rail ticketing website. Adani has paid Rs3.56 crore for this stake, but there is no clarity yet on total takeover.

   

• OYO plans over 500 hotels in host cities to capitalize on the World Cup fever. India remains a cricket crazy nation and this time around, OYO plans to locate these hotels very close to the relevant cricketing stadiums.

   

• Flipkart plans to foray into the personal loans space to enhance revenues. This will be syndicated through Axis Bank. Flipkart already has BNPL (Buy now pay later) and co-branded card offerings. Personal loan upper limit will be Rs5 lakhs.

   

• Indian PSU banks are not far behind in the digital journey. Punjab National Bank has launched PNB Metaverse to offer a virtual branch experience for customers. It can be accessed from mobiles and laptops and will be open to all customers of PNB.

   

• Lex Guru, the legal test preparation platform, has been acquired by Toprankers. This will allow Toprankers to expand its presence geographically. Earlier, Toprankers had also acquired the career guidance platform, ProBano.

   

• The world’s only $3 trillion company, Apple Inc, plans to boost sales of iPhones in India through more offline stores. Apple plans double digit growth in India and that will be done through discounts at all its online and offline stores..

   

Start-up story of the week – Are superstars responsible for endorsements?

That has been a major debate, especially, in areas like start-ups and gaming websites. Should big stars with huge fan following use their reputation to endorse products they are themselves not sure about. That is a tough call since the answer can be both ways. There is no way that any celebrity can know how a particular product or service would evolve. However, some of the star endorsers are just about being extra careful.

It is now very likely that Shah Rukh Khan will not renew his contract with Byju’s after the recent controversies surrounding its business model and its promoters. The contract started in 2017 and is a 6 year contract till September 2023. Clearly, in this case, a celebrity actor has decided that discretion is the better part of valour and has opted to stay out of the endorsement in future. That can be a good template for other celebrities to follow. At least, once the controversies are out in the open, they can always desist from endorsing such start-ups.