Weekly Musings – Big start-up updates for the week to April 05, 2024

9 Apr 2024 , 10:09 AM

START UP STORY OF THE WEEK

The start-up funding story continued its momentum in the latest week to April 05, 2024, although the total fund raising was relatively subdued at $151 Million in the week. This is sharply lower than the previous week and also lower than the average of the last 5 weeks. That is more due to the businesses getting adjusted to the new fiscal year. There were several big ticket deals in the week, with Ola Electric alone accounting for one-third of the total fund raising this week. The proposed $100 Million funding each by Rapido and Purplle have been mentioned more as a footnote as the fund raising is yet to be firmed up. In 10 out of the last 11 weeks, the start-ups raised more than $100 Million per week.  In the 5 weeks prior to the current week, the start-up collections were to the tune of $243 Million, $205 Million, $226 Million, $150 Million, and $381 Million. In the latest week to April 05, 2024, start-ups raised $152 Million across 222 start-up deals, with Ola Electric dominating.

NUMBER OF DEALS AND FUND RAISING

The number of deals in the latest week stood at 22 deals; compared with 17 deals, 14 deals, 18 deals, 17 deals, and 27 deals in the 5 weeks prior to that. That is indicative of a slew of big-ticket deals in the vicinity of over $10-15 Million on an average. Compared to the average of the last 5 weeks, the start-up funding in the latest week was -36.93% lower. On a week-on-week (WOW) basis the start-up collections were -37.45% lower. Cleantech was the big story of this week. Here is the 6-week start up story of India Inc.

Funding Week	Start-up funding raised
Week ending March 01, 2024	$381 Million
Week ending March 08, 2024	$150 Million
Week ending March 15, 2024	$226 Million
Week ending March 22, 2024	$205 Million
Week ending March 29, 2024	$243 Million
Average of previous 5 weeks	$241 Million
Week ending April 05, 2024	$152 Million

The start-up funding for the latest week ended April 05, 2024 was lower on week-on-week basis and also lower than the average of the previous five weeks. Seed stage start-up funding picked up sharply in the current week by 270% to $8.10 Million. In one of the major funding pipeline announcements, Centre Court Capital announced its maiden $42 Million fund to invest in early stage start-ups in sports and gaming space.

OLA ELECTRIC RAISES $50 MILLION FUNDING AHEAD OF IPO

Ola Electric, part of Ola group, has raised $50 Million (₹410 Crore) from EvolutionX Capital. The fund raising was done through the issue of 41,000 NCDs at an issue price of ₹1 Lakh each. EvolutionX is already a major investor in start-ups like Udaan, Mensa Brands, PharmEasy, Lendingkart etc. This round of funding comes within 6 months of Ola Electric having raised ₹3,200 Crore through a mix of equity and debt. The fund had seen participation of Temasek, SBI and others in the funding plan.

Ola Electric has already finalized plans to launch its electric autorickshaw targeted directly at the consumers. The company has already filed its draft red herring prospectus (DRHP) with SEBI for its proposed ₹7,250 Crore IPO. The IPO will comprise of ₹5,500 Crore of fresh issue and ₹1,750 Crore of offer for sale (OFS). Some of the large funds with exposure to Ola Electric are likely to participate and offer shares in the OFS.

SINGLEINTERFACE GETS $30 MILLION FOR HYPERLOCAL MARKETING

SingleInterface has secured $30 Million (₹247 Crore) from Singapore based Asia Partners. The round of funding also saw participation from the venture capital arm of PayPal. The idea is to use these funds to offer hyperlocal marketing, which is marketing that is extremely customized and localized to the local population. In addition, they will also use the funds to offer Ecommerce Solutions To various brands. SingleInterface will use these funds to expand its footprint globally, as well as to shore up product portfolio and build AI product portfolio. The start-up, SingleInterface, was founded in the year 2014 and is a full-stack platform that offers the full range of MARTECH services. This includes digital marketing, customer engagement, and ecommerce solutions for multi-location brands, in a customized and granular fashion backed by data based strategies.

NAMDEV FINVEST RAISES $19 MN TO DEEPEN RURAL FRANCHISE

The non-banking finance company (NBFC), Namdev Finvest, has raised $19 Million (₹158 Crore) as part of the pre-Series C funding round. The funding round was led by Maj Invest and in addition, it also saw participation from the promoter group and current employees of the company. Incidentally, this fund raising comes exactly 2 months after Namdev Finvest had raised $15 Million as part of Series-B funding. At that time, BII and LC Nueva had participated in the funding round. Like any NBFC, Namdev Finvest also needs funds to expand its asset book so that its capital adequacy meets the statutory norms. Namdev will use these funds to give a major boost to its rural business franchise and presence. Namdev Finvest was founded in the year 2013 to offer business loans to MSMEs (micro, small, and medium enterprises) as well as green financing options to rural customers.

INNOVITI TO PLANS TO RAISE $13.7 MILLION VIA RIGHTS AND PREFERRED ISSUE

This has not been included in the weekly fund raising as the actual fund raising is yet to happen. However, it has been included for completeness and give a full picture of upcoming deals of significant size. Innoviti will ra8ise $13.7 Million (₹115 Crore) with 3 new investors likely to joint the funding group. This will be part of the Series-E round of funding by the company and it will comprise of a rights issue and a preferential issue. Nearly 30% of the funding will come via rights issue and will be led by Bessemer Venture Partners and the Patni Family Office. Innoviti is a digital payment solutions company, which has been consistently profitable for the last 10 quarters. Innoviti will use fresh funds to boost its mid-market and online expansion; apart from expanding its payment aggregator business.

SCRUT RAISES $10 MILLION TO INCORPORATE GEN-AI USE CASES

Scrut Automation has just raised $10 Million (₹83 Crore) from investors. Incidentally, this funding round comes a year after it had raised $7.50 Million from Mass Mutual Investors. Scrut Automation will use the fresh funds to boost its technology and management stack; incorporate Gen-AI (artificial intelligence) use cases and also to expand its business franchise to North America and European markets. Scrut Automation is a 2-year old company that helps tech-first mid-market enterprises to build scalable GRC programmes aligned with their goals, risks, and resources. In any Gen-AI project, the testing of use cases is a very important and also time consuming task.

NIVARA HOME FINANCE GETS $10 MILLION FUNDING FROM BARING PE INDIA

The housing finance start-up, Nivara Home Finance, has just raised $10 Million (₹83 Crore) from key investors to drive its future expansion and growth plans. Nivara Home Finance was founded in the year 2015 and offers small ticket housing loans to micro-entrepreneurs and salaried professionals. Its loans are typically in the range of ₹5.00 Lakhs to ₹7.50 Lakhs. It currently operates through a network of 63 branches in 5 states and h as total AUM of ₹500 Crore. Interestingly, its gross NPAs are as low as 0.58%.  The funding round came from Baring Private Equity India.

TRAYA POCKETS $9 MILLION  TO OFFER CUSTOMIZED HAIRCARE SOLUTIONS

Traya, the customised haircare company floated by Saloni Anand, has just raised $9 Million (₹75 Crore) from a clutch of investors to offer customized haircare solutions. Traya uses advanced technology and offer hair care solutions that are customized to the specific needs of the customers. The funding will be used by Traya to drive business growth and offer an array of such personalised solutions to address the unique hair related needs of customers. The company also has a dedicated line for women.

SIFTHUB RAISES $5.50 MILLION FROM MATRIX VENTURES AND BLUME PARTNERS

SiftHub was is a new Gen-AI venture promoted by the former co-founder of LogiNext. The company has just raised $5.50 Million (₹46 Crore) from Matrix Partners, Blume Ventures, and others to generate personalized responses to queries. A few angel investors also participated in this round. SiftHub leverages Large Language Models (LLM) to help companies generate personalised responses to the queries received by their sales and pre-sales teams. This is a niche area of business, and has been attracting a lot of financers.

BOMBAY SHAVING RAISES $3 MILLION  DEBT FROM ALTERIA CAPITAL

Bombay Shaving Company, founded by Shantanu Deshpande, has raised $3 Million (₹24 Crore) to further refine the go-to-market strategy for the razor category. This remains a major focus area for the company at this juncture. In addition, Bombay Shaving Products is also looking at the funding to bolster its offline presence. It will be expanding its offline presence by doubling its store count to 25 stores. The company continues to generate negative EBITDA at this juncture. This was entirely a debt funding from Alteria Capital. Bombay Saving Products is looking at around 35% growth in FY25. Bombay Shaving Products started in the year 2016 as a D2C men’s shaving and grooming products brand. In subsequent years, it has expanded into other categories like women’s grooming. It is also now positioned as an omnichannel brand. It is also available in all ecommerce marketplaces.

OTHER FUNDING ROUNDS IN THE WEEK

Apart from the above, there were also other funding rounds in the week, of smaller sizes. Here is a quick update.

• Assembly Bags, the travel and lifestyle start-up, raised $2.1 Million from Prath Ventures. Assembly Bags offers mass-premium luggage, backpacks and travel accessories tailored for the contemporary traveller.
• Vodex, another Gen-AI (generative artificial intelligence) start-up has raised $2 Million from Unicorn India and Pentathlon Ventures. The funds will be used by Vodex to bankroll its global expansion and grow its business next year by around four times. Vodex is into generating AI-powered sales agents to have human-like conversations.
• In another deal, ONO has got funding of $1.3 Million to boost its supply chain for agricultural produce. It is into supporting the agricultural supply chain in India’s APMC/MANDI network. ONO is a crop price and mandi discovery platform for farmers.

Apart from these smaller deals, there are also some big upcoming funding deals in the near future.

BIG UPCOMING FUNDING DEALS

There are two major upcoming funding deals coming up.

• Rapido plans to raise close to $100 Million from Westbridge Capital and others. It has commitments of $70 Million and is also talking to select family offices. The funding round is likely to be done at a valuation of $900 Million for the company.
• In another similar sized deal, Purplle plans to raise $100 Million in investment from the Abu Dhabi Investment Authority (ADIA) to open more offline stores. The infusion is likely to happen through a secondary transaction in which some early investors are likely to take an exit. Currently, Purplle has just 2 offline stores and plans to add another r10 stores in the coming months.

Being the first week of the new fiscal, the start-up scene was relatively tepid. However, the coming weeks could see more action.