Weekly Musings – Big start-up updates for the week to December 22, 2023

24 Dec 2023 , 10:00 AM

In line with the surge in fund in the previous week to $527 million, start-ups had another wonderful week raising $349 million. The funding round was largely led by GreyOrange, which cornered around 39% of the funding this week. The number of deals were higher at 25 deals in the latest week. For the week to December 22, 2023, the start-up funding at $349 million was lower than the previous week at $527 million. In fact, when compared to the average of the last 5 weeks, the start-up funding in the latest week was a whopping 124%, higher 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 November 17, 2023	$44 million
Week ending November 24, 2023	$61 million
Week ending December 01, 2023	$62 million
Week ending December 08, 2023	$85 million
Week ending December 15, 2023	$527 million
Average of previous 5 weeks	$156 million
Week ending December 22, 2023	$349 million

The start-up funding for the latest week ended December 22, 2023 was lower on a week-on-week basis, but more than double the average of the last 5 weeks. In fact, the current week marks a break after the start-up funding stayed under $100 million for four weeks in a row. The latest week funding flows were led by. Let us now move to the actual break-up of the start-up funding in the latest week.

GreyOrange raises $135 million for warehouse automation

In the biggest deal of the week, GreyOrange has raised a sum of $135 million to boost automation for warehouses and fulfilment centres in the retail value chain. The funding round was led by Anthelion Capital with participation coming in from existing investors like Mithrel, 3State Ventures and Blume Ventures. Just about a year back, GreyOrange had raised a sum of $110 million for its business needs. GreyOrange is a robotics company and this is part of tis Series-D funding. This translates into fund raising of Rs1,123 crore.

GreyOrange will deploy these funds to scale up its technology leadership, to expand its fulfilment centres, as well as the entire support system comprising of warehouses, distribution centres and retail stores. GreyOrange is a robotics specialized company that enables automation of warehouse and fulfilment centre operations to make them more efficient. The company will also be investing heavily in boosting its technology stack.

Kitchens@ bags $65 million to streamline dining business

Cloud kitchen start-up, Kitchens@ has bagged $65 million in funding to streamline its dining business. It may be recollected that Kitchens had successfully acquired Swiggy Access Kitchen and runs a fairly large and successful cloud kitchen. The funding of $65 million or Rs541 crore approximately, came from Finnest, the UK based PE fund. This is part of the Series C round of funding for the company.

The company currently has a hybrid service model called the Dinerium and these funds will be used to expand the Dinerium franchise. Cloud kitchens act as the intermediary between the restaurant and the customer handling the last mile connectivity in the process. Kitchens@ currently has presence in 6 major cities and 45 smaller locations. It has a pan-India network of 700 such cloud kitchens. 

VideoVerse raises $45 million to expand global footprint

VideoVerse, that is backed by Binny Bansal of Flipkart fame, will be using these funds for its AI (artificial intelligence) powered video editing solution. The funds will be largely utilized to expand its global footprint and also to drive innovation in the area of media technology. The funding will come from Bluestone and the managing partner of Bluestone will join the board of directors of VideoVerse to ensure skin in the game for the investor.

VideoVerse started in the year 2016 as Toch.ai offering a full stack cloud based real time video editing platform. It largely caters to broadcasters, marketing agencies and OTT companies. This deal will give Bluestone Equity Partners a minority stake in VideoVerse. Video editing with in-built intelligence is a great product in the modern market where video delivery with minimal time to action is the key to success in the ecommerce game.

BluSmart gets $24 million to build EV charging superhubs

Delhi based BluSmart has raised a sum of $24 million from existing investors. BluSmart will use the capital so raised to build large-scale EV charging superhubs, which is the key to expanding the relevance of EVs in the modern auto product portfolio. BluSmart was founded in the year 2019 and it offers EV ride hailing services and charging infrastructure across Delhi, NCR, Bengaluru, and other major cities. The $24 million or Rs200 crore is entirely in the form of fresh equity round. The company will be using the funds to build large scale EV charging super hubs as well as to catalysing the expansion of its electric vehicle ride hailing services. 

Fasal, the agri start-up raised $12 million from investors

Fasal (literally meaning crop), has raised $12 million to fortify its B2B brand (Fasal Fresh) and to invest in research & development (R&D) activity. The latest funding round was led by TDK Ventures and British International Investment. In addition, the funding round also saw participation from Navam Capital, Aureolis Ventures, ITI Growth Fund, 3One4 Capital, and Omnivore. The B2B brand (Fasal Fresh) is already fairly popular across India and South East Asia. It is also developing its proprietary crop (Internet of Things) IOT model along with instructions to implement. The $12 million raised by Fasal, roughly translates into funding round of Rs100 crore in the recent past.

Vivek Sinha raises $11 million for his edtech venture

Vivek Shah is a former executive at Unacademy and brings rich experiences to the table on the edtech business model. For his latest edtech venture, the company will look to raise $11 million, which will include participation from Lightspeed Venture Partners, Matrix Partners as well as OYO group chairman, Ritesh Agarwal in his personal capacity. The company will purely be offering support services like to the healthcare industry, including upskilling. The sum of $11 million or Rs91 crore will be used for the new start-up venture. While the venture is yet to be named, the parent company has been registered under the name of Beyond Odds. 

Farmley raises $6.7 million funding for channel expansion

Farmley, the D2C snacking venture, has raised $6.7 million in a round funding from the BC Jindal group. In addition, there was funding participation from DSG Consumer Partners, Omnivore and Alkemi Partners. The fresh funds will be used for product innovation, diversifying distribution channels and for expanding the brand building efforts of the company. The company was founded in 2017 by Akash Sharma and Abhishek Agarwal to offer dry fruits in different flavours and snacking formats such as peri peri, Makhanas, chilli cashews, date bites etc. The $6.7 million or Rs55.6 crore of funding was a pre-Series B round of funding. Farmley is based out of New Delhi.

BatX Energies bags $5 million from Zephyr Peacock and others

BatX Energies has raised $5 million funding or around Rs41 crore to fortify its R&D in the area of battery recycling. The funding round was led by Zephyr Peacock with participation from LetsVenture, JITO Angel Network, and the family offices of Mankind Pharma, Excel Industries and BluSmart. Its focus will be in fine tuning its R&D into the battery recycling technology. The start-up, BatX Energies, is apparently able to 99.5% pure lithium nickel and cobalt from the black mass of Li-Ion cells using its propriety hydro-electro process. It will also use the funds to set up a reverse logistics network to procure waste batteries back for recycling. 

Kapture CX and Finhaat raise $7 million in between them

Let us look at some more such interesting deals for the week. Kapture CX raised $4 million to automate customer support organizations. Kapture CX offers AI enabled customer relationship management (CRM) software which enables the business to reach the customer at the point of contact of their choice. Kapture CX will use the funds to further push its global reach and expansion. Globally, Kapture CX already has presence in the US, UAE, Indonesia, and Saudi Arabia. 

In another fund raising deal, Finhaat has raised $3 million to offer tech-based insurance distribution solutions. It will use the funds to enhance its technology models, roll out innovative products, scale up its partner base, get the right manpower set and also to invest in the technology stack. It offers the complete range of insurance products on its ecommerce insurance platform. This is a seed funding round led by Omnivore and with participation from Kettleborough VC. 

Other deals of note in the week

Listed below are the some of the other deal of note during the year. 

1. Finayo has bagged $1.9 million or Rs16 crore F-Mec International Services, Choice Finserv, and others. It will; use the funds to optimise fleet management and enhance financial inclusion and to bolster EV adoption in the country.
2. Cloud kitchen start-up, Curefoods, has raised $1.2 million or Rs10 crore into the food discovery platform HOGR in its seed funding round. Hogr allows users to discover restaurants and dishes through personalized recommendations. 
3. Proptech start-up (GetSetHome) has bagged funding of $1 million from Mistry Ventures to simplify house renting. The start-up will use the funds to expand into micro markets. GetSetHome; not only arranges full furnished homes, but also manages shared homes.

There were many more smaller deals during the week, but this broadly covers the colour and nature of requests that are coming.

AIFs and the evergreening story

After the recent RBI ban on evergreening of loans through alternate investment funds (AIFs), the issue of evergreening is back all over again. This is how it works. If a company has borrower from a bank or an NBFC and is on the verge of default, then it creates a problem for the bank or NFBCs as such losses will have to be provided for. A shorter route is to lend the funds to an AIF (alternate investment fund), which will in turn put that money into the pockets of its clients. Now, RBI has banned any such loans to AIFs, where the AIF is connected to such a restricted entity. It is likely to hit the start-up scene as a lucrative source of funding goes away. But, SEBI may dilute this provision in the larger interests of the start-up ecosystem in India.