Weekly Musings – Big start-up updates for the week to February 02, 2024

5 Feb 2024 , 06:54 AM

After raising $1 billion in December 2023 and $509 million in January 2024, the start-up funding story was relatively tepid in the week to February 02, 2024. In the last 3 weeks, the start-up fund raising was consistently above $100 million per week. In fact, the start-up collections were to the tune of $170 million, $136 million, and $145 million in the 3 weeks prior to the current week. In the latest week to February 02, 2024, start-ups raised just $48 million across just 8 start-up deals. Once again, the start-up story was dominated by a handful of names in the segment. Deal sizes averaged around $6 million per deal for the latest week. For sake of completeness, we have also included some of the potential deals too. These are deals that are about to be signed shortly, but almost as good as done.

The number of deals were lower at just 8 deals, compared to 13 deals, 21 deals, and 25 deals respectively in the previous three weeks. That is indicative of a lot of mid-ticket deals in the vicinity of over $6-8 million on an average. Compared to the average of the last 5 weeks, the start-up funding in the latest week was -60% lower. On a month-on-month basis the start-up collections were -71.8% lower. Here is the story of start-up fund raising over the last 6 weeks; along with a comparison with the average of the previous five weeks.

Funding Week	Start-up funding raised
Week ending December 29, 2023	$90 million
Week ending January 05, 2024	$58 million
Week ending January 12, 2024	$145 million
Week ending January 19, 2024	$136 million
Week ending January 26, 2024	$170 million
Average of previous 5 weeks	$120 million
Week ending February 02, 2024	$48 million

The start-up funding for the latest week ended February 02, 2024 was lower on a month-on-month basis; as well as compared to the average of the previous five weeks. That can be attributed to a tinge of caution int the start-up caution ahead of the Union Budget presentation as well as the Fed policy statement. Both these factors tend to have a deep impact on the start-up funding commitments during the week.

BluSmart raises $25 million to expand EV Charging Infrastructure

BluSmart, the Delhi-NCR-based electric mobility startup, has just raised $25 million (Rs208 crore). The company plans to deploy the fresh proceeds to expand its EV charging infrastructure on a pan-India basis. BluSmart was founded in the year 2019 to offer EV ride-hailing services and charging infrastructure across Delhi-NCR region, Bengaluru, and other major cities in India. Incidentally, this funding round comes just shortly after the company had raised $24 million in fresh funding from Switzerland based Responsibility Investments AG in a mezzanine funding round. This funding round had included partial equity and debt in the structure. Currently, the rapid expansion of EV charging infrastructure is the missing link in the India EV story; since that lies at the core of rapid expansion.

Stellapps to raise $20 million to fuel expansion plans

The daily start-up, Stellapps, will be raising around $20 million (Rs166 crore) predominantly from existing investors. In fact, nearly 70% of the fund raising will be through existing investors like Celesta Capital, Omnivore, Gates Foundation, IDH FARMFIT Fund, Blume Ventures, and Qualcomm Ventures. There have also been two additional funds who are participating in the fund raising. Stellapps is also targeting an IPO in the next 3 years. The funds raised by Stellapps will be used for further expansion and the focus of the growth would largely be on value-added dairy products. However, the final call on the funding round is yet to be taken and the relevant term sheets are yet to be signed.

Wiz Freight secures $15 million funding for business expansion 

In a Series-B round of start-up funding, Wiz Freight will raise about $15 million (Rs125 crore) to fund its expansion. Wiz Freight is a supply chain start-up and the fresh funds will be used for growth and expansion. Wiz Freight was founded in the year 2020 to help exporters and importers book and also to manage cross-border shipments. Wiz Freight has 50 offices around the world, which shipped 45,744 TEU (total equivalent units). The latest round of fund saw participation from Tiger Global Management, Nippon Express Fund, Axilor Technologies Fund, and Arali Investments.

Asianxt to raise $10-15 million funding to foray into media space

Asianxt is in advanced talks to raise between $10 million and $15 million to foray into the social media space with the short-format video app next month. The short format video app leverages artificial intelligence (AI) for seamless content creation across multiple languages at the touch of a button. The launch of the app allows creators to develop content in their native language. The platform will also facilitate its publication in multiple languages. Asianxt is backed by Jupiter Capital and the fund raising is expected to happen shortly. 

Grow Indigo gets $8 million funding to drive sustainable agriculture

Grow Indigo has raised $8 million (Rs67 crore) from its existing stakeholders; Indigo AG and MAHYCO. In addition, other angel investors also participated in the funding round. In the last round of funding, Grow Indigo had raised $6 million from the same investors. Grow Indigo was founded in the year 2018 as a joint venture between Indigo AG and MAHYCO. The company is a key player in the agri-marketplace and offers carbon farming solutions. This is a strategic funding round to take the business to the next level.

AquaConnect gets $4 million funding to disrupt Indian aquaculture ecosystem

AquaConnect has just secured $4 million (Rs33 crore) to ramp up operations, expand its presence, build the network and also to invest in its tech stack. AquaConnect is backed by AgFunder, Omnivore and Rebright Partners. The Chennai based aquaculture platform operates last-mile touchpoints and also offers credit services to its retail partners. The latest $4 million funding round was a pre-Series-B funding round led by the US based S2G Ventures, with the existing investors also participating in the funding round.

Black Opal gets $3 million to expand its property fintech venture

Black Opal was founded by Prasoon Chauhan and Ishan Agarwal in the year 2020 as a platform focussed on the real estate sector. The $3 million funding has come in from SBI and HDFC Bank. Black Opal will use the fresh funds to expand its services and also to expand the team of JustHomz, which is a property fintech market place that caters to the B2B and the B2C marketplace. Black Opal wants to use the funds to onboard more than 1 lakh customers and touch loan disbursements of up to $5 million in the next six months. 

Two rounds of undisclosed funding amounts

Firstly, Moms Home has got funding from Mistry Ventures to expand its organic baby are range of products and solutions. Moms Home operates organic and sustainable apparel and baby essentials. Moms Home will use the funds to expand its offline presence and enhance its existing product portfolio as well as introduce new categories of products in the market. The start-up currently has a customer base of over 5 lakh mothers. It will also use the funds to ramp up its offline presence. The total sum raised was not disclosed. 

In another round of funding, Arzoo raised an undisclosed sum in a Series-B round to digitize its consumer electronics stores. Arzooo will use the fresh funds to strengthen its technological infrastructure and deepen its focus on the consumer durable market. It may be recollected that in the last funding round in 2022, Arzoo had raised $70 million from SBI Investments and Trifecta. Arzoo is a B2B retail technology platform for all electronics and other related products.

MOVERS AND SHAKERS: START-UP NEWS WITH DEEP IMPACT

Here are the big start-up news updates that can have a profound impact on the start-up ecosystem in India. 

1. Even as Byju’s investors have been trying to gang up to remove Byju Raveendran from the chair, Raveendran has deemed such moves totally illegitimate. Earlier, some of the major investors of Byju’s had called for an extraordinary general meeting (EGM) to reconstitute its board and change its leadership This was after Byju’s announced a rights issue at a discount of 99% to the last valuation. Byju Raveendran has questioned the locus standi of the investors to propose a change in the CEO of the company. 

    

2. Apple is now becoming a start manufacturer of its iconic products in India. According to a recent statement by Apple Inc, it had achieved revenues of Rs49,300 crore ($6 billion) for the quarter ended December 2023. That is a sharp spike of 33% over the FY22 number. Apple CEO, Tim Cook, highlighted that more than 24 countries across Europe and Asia Pacific had recorded record revenues. In 2023, Apple also pipped Samsung with 23% market share of smartphones, compared to just 21% for Samsung.

    

3. The Draft National Data Governance (NDG) Policy is now almost ready and it is under the final stages of completion. This was announced as part of the Budget document presented by the finance minister, Nirmala Sitharaman. The National Data Governance Policy will enable access to anonymised data. This will address one of the biggest challenges to the adoption of artificial intelligence (AI) in India in a big way. Today, the lack of datasets is the issue and NDG will enable widespread access to anonymised data.

    

4. It is now official that Disney will sell 60% of its India media business at a relatively lower valuation. The deal with Viacom (part of the Reliance group) is likely to be completed by the end of February 2024. The valuation of the deal has significantly diminished after the dissolution of Sony-Zee merger as much of the value for Disney was the outcome of its deal with Zee (which is now shelved. Actually, Disney will be getting a lower price compared to what it had paid for the business back in the year 2019.

It has been a busy week for start-ups, but the action now shifts to the key news flows that will have an impact on the start-up ecosystem.