Weekly Musings – Big start-up updates for the week to March 15, 2024

18 Mar 2024 , 07:17 AM

The start-up funding built up added momentum in the latest week, with the fund raising at $226 Million in the week to March 15, 2024 was higher than the previous week and the average of last 5 weeks. There were several big ticket deals of $20 Million and above. Also, the $100 Million proposed to be raised by Zerodha AMC is not included in this list as it was still under deliberations, but we have included the deal for the sake of completeness. What is material is that in 8 out of the last 9 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 $150 Million, $381 Million, $ 110 Million, $125 Million, and $168 Million. In the latest week to March 15, 2024, start-ups raised $226 Million (excluding $100 Million proposed to be raised by Zerodha AMC) across 18 start-up deals.

The number of deals in the latest week stood at 18 deals; compared with 17 deals, 27 deals, 15 deals, 18 deals, and 25 deals respectively in the 5 weeks prior to that. That is indicative of a slew of big-ticket deals in the vicinity of over $15-20 Million on an average. Compared to the average of the last 5 weeks, the start-up funding in the latest week was 20.86% higher. On a month-on-month (MOM) basis the start-up collections were 50.67% higher. Fintechs accounted for 40% of funding this week. Here is the 6-week start up story of India Inc.

Funding Week	Start-up funding raised
Week ending February 09, 2024	$168 Million
Week ending February 16, 2024	$125 Million
Week ending February 23, 2024	$110 Million
Week ending March 01, 2024	$381 Million
Week ending March 08, 2024	$150 Million
Average of previous 5 weeks	$187 Million
Week ending March 15, 2024	$226 Million

The start-up funding for the latest week ended March 15, 2024 was sharply higher on month-on-month basis; and meaningfully higher than the average of the previous five weeks. The numbers would have been much bigger if Zerodha AMC had been also added to this list. While equity dominated, there is increasing reliance on debt too.

Pocket FM raises $100 Million from Lightspeed Ventures

Pocket FM has raised $100 Million (₹830 Crore) from Lightspeed Ventures and is also in talks to raise another $160 Million from Abu Dhabi Investment Authority (ADIA). However, the talks with the ADIA are still in the preliminary stages only. Pocket FM had recent scaled up its ARR to $160 Million at the end of  2023, marking a growth of over 500%. Pocket FM is an audio book platform offering content across multiple languages and genres.

Zerodha AMC parleying with investors to raise $100 Million

This is another deal of the Zerodha AMC raising about $100 Million (₹830 Crore) and the talks are still on. If it happens, this will be the first serious fund raising by the Zerodha group. Zerodha was floated as a low-cost digital broker nearly 15 years back and has emerged as the most powerful broker in India in terms of volumes and net profits. However, fund raising deliberations are still at the early stage. Zerodha floated its AMC only in 2023 and plans to focus largely on debt products and on passive products like index funds and index ETFs. It would be interesting since Zerodha has been bootstrapped since its inception.

Perfios raises $80 Million from Ontario Teachers Fund

Perfios has just raised a whopping sum of $80 Million (₹663 Crore) from an arm of Ontario Teachers Fund. This has been done at a valuation of $1 Billion, which propels the company into the Unicorn league. Only in September 2023, Perfios had raised $229 Million from Kedaara Capital in a Series-D round of funding. Perfios is also look at the opportunity to come out with an IPO to give exit to early investors and list on the Indian bourses. Perfios is a Fintech SAAS (software as a service) start-up and this part of late stage funding to prepare them for the IPO. Perfios becomes the second unicorn of 2024 after Krutrim. Perfios plans to deploy the fresh proceeds to boost its international expansion efforts and its global footprint; apart from strengthening its tech stack too. Perfios is looking at M&A options.

Lohum raises $54 Million in funding round led by Singularity Growth

The New Delhi based EV batter manufacturing and recycling start-up, Lohum, has raised $54 Million (₹448 Crore) in Series-B funding in a deal led by Singularity Growth. Others who participated in this round included Baring Private Equity, Cactus Venture Partners, and Venture East. Perfios will use the funds to fuel its market expansion as well as scale up its recycling operations across India. It will also use these funds to transition into new energy transition materials markets in North America, the EU, the Middle East, Africa, and Asia. Many of the participating funds were already existing investors in Lohum. The board of Lohum has passed a special resolution to issue 844 Series B2 CCPS (compulsorily convertible preference shares)

Nanonets gets $29 Million fresh funding For R&D and market expansion

Nanonets has raised a sum of $29 Million (₹240 Crore) in a round led by Accel Partners. The fresh funds will be used to fund research and development (R&D), improving algorithms for handling unstructured data, and launching new products in the market. Nanonets is into the business of helping other enterprises leverage the power of artificial intelligence (AI) in order to make workflow automation easier. Apart from Accel Partners, the others who participated in this funding round include Elevation Capital and Y-Combinator. Nanonets has a unique value proposition because the businesses today are producing more documents than ever and a lot of productive time and manpower is getting deployed in these. Workflow automation will ease this problem with the use of technology.

CureSkin raises $20 Million to scale up its AI-Powered Dermatology Platform

CureSkin, which offers personalized dermatology and hair care solutions on a digital platform, has raised $20 Million (₹166 Crore) to scale up its AI-powered digital platform for dermatology solutions. The funding round was led by venture capital firm, HealthQuad, and saw participation from existing investors like JSW Ventures, Khosla Ventures and Sharrp Ventures. CureSkin will use the fresh proceeds of this fund raising to enhance capabilities, expand offerings, scale up operations and accelerate growth. This is part of the Series-B funding round of CureSkin. The company is of recent origins and was floated only in the year 2017 as an app that offers personalised and dermatologist-prescribed skin and hair care solutions. It offers product, advice, and detailed and customized guidance.

Blacksoil NBFC Secures raises $12 Million to fatten its credit playbook

Blacksoil, a non-banking finance company, has raised $12 Million (₹100 Crore) to boost its capital base, a pre-requisite for any NBFC looking to expand its credit book. This will enhance the lender’s credit profile and boost its borrowing and lending capabilities in the market. This is the fourth capital infusion into Blacksoil in the last 8 years. Blacksoil is an alternative credit platform and it comprises of an RBI-registered systemically important NBFC (NBFC-SI) and a SEBI-registered AIF (alternate investment fund). The funds have been raised through its existing Indian investors as well as family offices via a rights issue. Blacksoil offers customised alternative credit solutions to growth companies, financial institutions, NBFCs and MSMEs across diverse sectors.

DriveU plans to raise $10 Million in funding

While the fund raising is yet to happen, it is at the final stages of deliberation and the funds are expected to come in from venture capital firms and from family offices. Drive is an alternative cab aggregator platform and it will use the funds to penetrate deeper into major metro cities and enter new cities. The company plans to close the next fiscal year FY24 with a net profit, albeit small. This will be part of its Series-B funding round. DriveU is currently piloting on-demand valet service for its B2B and B2C customers. DriveU is an online aggregator platform where drivers can register and users can hire drivers on an hourly basis.

Bluestone to raise $9 Million debt from Trifecta Capital

Bluestone will shortly raise $9 Million (₹75 Crore) to expand its business operations and fund its larger expansion plans. The funding will be raised in the form of debt from Trifecta Capital and the funding is likely to be done at a valuation of $440 Million of enterprise valuation for the company. Bluestone is an omnichannel jewellery startup and the company is also planning a mega ₹2,000 Crore IPO. Against debt, Bluestone will allot Series X1 Debentures to Trifecta Venture Debt Fund-III. The IPO, when it actually comes out, is likely to be a mix of fresh issue of shares and an offer for sale.

FREED raises $7.30 Million to help customers become debt free

As part of its Series-A round of funding, the Fintech player (FREED) has raised $7.30 Million (₹60 Crore) in a funding round led by Sorin Investments and Multiply Ventures. The round also saw participation from Piper Serica and others. FREED will use the funds to expand its reach and enrich its technology stack. FREED has a business model that basically leverages technology to provide solutions to individuals to get free of debt. FREED was founded in the year 2020 by Ritesh Srivastava. Currently, FREED offers two plans on these lines, which include the Debt Resolution Programme and Debt Consolidation Programme. Currently, FREED has already enrolled 25,000 customers and nearly ₹1,200 Crore in stressed debt.

KITES Senior Care gets $5.40 Million from Ranjan Pai family office

KITES Senior Care currently offers the full spectrum of geriatric services at its care facilities as well as the residences of senior citizens. The fresh capital of $5.40 Million (₹45 Crore) will help the company expand its footprint across Southern India and to also enhance its bed capacity from the current 340 to 1,000. The funding came from the family offices of Manipal Education and Medical Group (MEMG) family office fund, which is part of the Ranjan Pai group. In addition, KITES will also raise ₹20 Crore by way of debt from existing investors. KITES was founded in Bengaluru in 2016 to offer geriatric services at its care facilities and at homes. This includes pre and post-hospitalisation rehab care, palliative care, and dementia care. It also has plans to venture into senior community living in the future.

Kimbal Tech raises $5 Million funding to offer Smart Meter Solutions

Kimbal has just raised $5 Million (₹42 Crore) to scale up existing operations and to invest in new product development. Kimbal Tech was founded by Ayush Singhal in 2011 to offer smart meters and communication infrastructure to enable smart metering. Currently, it is coming up with a smart meter deployment of 7.7 Mn alongside 5.2 Mn Radio-Mesh powered network interface cards. The funding was raised by investment advisory firm (Niveshaay), with participation from Mittal Analytics and Sandeep Kapadia. It will scale up its current operations and product development for building a power distribution ecosystem. It has already deployed 1 Million such smart meters till date.

Diabetes Focussed Sugar.Fit raises $5 Million in Series-A round funding

Sugar.Fit was founded in 2021 by Madan Somasundaram, and Shivtosh Kumar. It is a healthtech start-up that offers integrated diabetes management and reversal through a data-centric approach. The latest funding round of $5 Million (₹42 Crore) was led by B-Capital in a Series-A round of funding. The company already counts MassMutual Ventures and Tanglin Venture Partners, among its key investors. The funding will be used to enhance its technology stack and product range. The company will also use the funds to enhance its brand presence as a one-stop shop for diabetes management.

TapFin gets $4 Million to boost clean mobility offerings

In the other big deal of the week, TapFin raised $4 Million (₹33 Crore) and will deploy the fresh proceeds to fuel growth plans and market reach; apart from boosting its technology stack. TapFin provides financing, value-added services and income-generation opportunities for key participants in the clean mobility space. It also offers the complete ecosystem to make their business a success in this field. Elevar Capital led the funding round.

Overall, it has been a busy week for start-up funding overall.