Weekly Musings – Big start-up updates for the week to November 03, 2023

6 Nov 2023 , 09:17 AM

Compared to the previous week, the current week saw flows into start-ups fall sharply. Probably, the difference was Ola Electric, which raised bulk of the funding in the previous week. For the week to November 03, 2023, the start-up funding was 71.5% lower than the previous week at $133 million. In fact, when compared to the average of the last 5 weeks, the start-up funding in the latest week almost halved, 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 September 29, 2023	$194 million
Week ending October 06, 2023	$119 million
Week ending October 13, 2023	$288 million
Week ending October 20, 2023	$237 million
Week ending October 27, 2023	$466 million
Average of previous 5 weeks	$261 million
Week ending November 03, 2023	$133 million

The start-up funding for the latest week ended November 03, 2023 was sharply lower and the difference between the two weeks, perhaps, was Ola Electric. The latest week funding flows were led by Aequs, Skyroot, Vridhi, Growcoms and others; across a total of 18 deals. Let us now move to the actually break-up of the start-up funding in the latest week.

A funding pipeline is getting built

While the funding of start-ups is critical, what is also critical is that there is a funnel of funds ready to finance start-ups. That appears to be getting aggressive and here are some stand out instances in this week.

• In a significant development, deeptech VC financer, Java Capital, has announced the final close of its Rs50 crore fund. The fund will invest in start-ups across deeptech, climate tech and B2B. Java already has investments in Agnikul Cosmos, Eplane Company, KUKU FM, Eat Better, Codingal etc. It is likely to use its Rs25 crore Greenshoe option.

   

• Meanwhile, there is likely to be more traction on gaming. Kratos Studio has allocated Rs50 crore to help gaming studios to transition games to blockchain. It plans to participate in around 10 to 15 such studios. The network program will be funded up to Rs50 crore with more in the offing.

   

• VC Firm Induckt Global has secured SEBI nod for its Rs320 crore fund to invest in technology start-ups. It would be sector agnostic and will look to invest in tech start-ups across healthcare, education, and ecommerce. It is currently in the process of raising capital from LPs and HNIs in India.

Where the major funding deals came during the week

For the week ended November 03, 2023 the start-ups saw fund raising of $133 million across a total of 18 deals. Here is a quick rundown on the other major deals in the start-up space during the week ended November 03, 2023.

1. In one of the biggest funding rounds of the week, Aequs raised $54 million, accounting for 40% of the total fund raising for the week. Aequs will use the funds to strengthen its high precision components manufacturing. The funding round was led by Amansa Capital of Singapore with participation from Steadview Capital and the family office of NR Narayanamurthy. Aequs will use the fresh funds to launch new advanced technology products vertical to manufacture high precision components. Aequs has clients like Boeing, Airbus, Safran and Honeywell for its core products.

    

2. Skyroot, the SpaceTech start-up, has raised $27 million or approximately Rs225 crore from Temasek of Singapore. Skyroot builds space launch vehicles. It will use the fresh funds to accelerate its commercial satellite launches, to boost its tech innovation as well as to expand the manpower stack and to improve launch frequency. It was a pre-Series C funding round.

    

3. The other major deal was $18 million in start-up fund raised by Vridhi Home Finance, or approximately Rs150 crore from Elevation Capital. Vridhi Home Finance is a Phygital housing finance company, which had been boot strapped till date. It will use the funds to create a home loan channel in tier 2 and tier 3 cities for salaried persons and also for the self-employed. Vridhi Home Finance is currently operating predominantly in the states of Karnataka and Andhra Pradesh.

    

4. Sugar.Fit has raised $11 million in funding to help people combat diabetes. It is considered to be rampant in India and one of the biggest lifestyle diseases in India. The funding was led by Mass Mutual Ventures with participation from Tanglin Venture Partners and others. Sugar.Fit is a healthtech start-up which will use the fresh capital to expand its product offerings. It will also use the funds to expand its offline presence as well as to accelerate R&D. The healthtech start-up seeks to manage and reverse Type-2 diabetes and also pre-diabetes through a data based approach and digital delivery.

    

5. Fibmold, the sustainable packaging company has secured funding of $10 million from Omnivore and Accel Partners. Fibmold manufactures eco-friendly moulded fibre packaging the mimic the functioning of rigid plastics. It manufactures these packaging items from natural fibre, including bamboo, bagasse, husk, wheat straw and even waste paper. It wants businesses to shift away from single-use plastics.

    

6. Growcoms has raised $3.5 million from JSW Ventures and others to digitize the spices value chain in India. Growcoms will use the funds to bolster its product portfolio as well as its technology stack to effectively manage the entire spices value chain. The start-up procures spices directly from the farmers and at the front-end, it has partnerships with the processors. It offers traceable spices using blockchain technology. Its client list includes food companies, flavour houses, seasoning companies, FMCG outfits etc.

    

7. Finally, there were a slew of smaller funding rounds for start-ups in the range of $1 million to $2 million. Funstop Games, the casual gaming studio, has raised $1.5 million from InfoEdge Ventures. Funstop Games makes casual games for the global audience. In another round, the edtech platform, 1% Club, has got Rs10 crore of $1.2 million in funding from Nikhil Kamath’s Gruhas. This edtech platform has been floated by popular Finfluencer, Sharan Hedge. Infurnia also secured $1.5 million in funding to simplify workflow for architecture and interior design businesses. Infurnia is an all-in-one cloud native company. Infurnia will use the funds to expand market outreach. It also plans to enter the North American market soon. The funding came from the promoter of Jaipur Rugs in h is personal capacity. Lastly, the popular south India snacking outfit, Sweet Karam Coffee, has bagged $1.2 million from Fireside Ventures. They will use the funds to expand offline presence and to expand to new geographies. 

The latest week to November 03, 2023 may have been tepid in terms of fund raising compared to the previous. However, in terms of number of deals and the breadth of exposure, it has been an action packed week.