Weekly Musings – Big start-up updates for the week to November 10, 2023

13 Nov 2023 , 03:31 PM

Compared to the previous week, the current week saw flows into start-ups pick up marginally, but just. Probably, the difference was the presence of big names like XpressBees and Zepto in the current week. For the week to November 10, 2023, the start-up funding at $159 million was 19.5% higher 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 was lower by a full 36.1%, 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 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
Week ending November 03, 2023	$133 million
Average of previous 5 weeks	$249 million
Week ending November 10, 2023	$159 million

The start-up funding for the latest week ended November 10, 2023 was higher on a week-on-week basis but lower than the average of the last 5 weeks. That could be because the week to October 27, 2023 was largely skewed by the mega funding deal of Ola Electric. The latest week funding flows were led by XpressBees, Zepto, Euler, Sequeretek 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.

Week was dominated by the XpressBees Funding

The week to November 10, 2023 was largely dominated by the XpressBees funding. Logistics unicorn, XpressBees secured $80 million in funding From Teachers Venture Growth Fund during the week and accounted for nearly half the total funding for the week. Now, the Teachers Venture Growth Fund is an arm of Ontario Teachers Pension Fund, one of the large pension funds based out of Canada, that is quite active in the Indian markets. It was a late stage funding that was obtained by XpressBees from the Canadian pension fund. XpressBees Fund will use the funds to drive growth for the XpressBees platform, which is broadly designed on the same business lines as the listed entity, Delhivery. This also marks the first funding into India from Ontario Teachers Pension Fund via the TVG arm. The Ontario Pension Fund had already put up a proposal to take a majority stake in XpressBees, which has since been approved by the Competition Commission of India (CCI). XpressBees, like most unicorns, is a loss making entity with reported net losses of Rs180 crore for the financial year FY23, ending March 2023. 

Where the major funding deals came during the week

For the week ended November 10, 2023 the start-ups saw fund raising of $159 million across a total of 18 deals. This was dominated by $80 million raised by XpressBees from the Teachers Venture Growth (TVG) Fund, part of the Ontario Teacher’s Pension Fund group. Here is a quick rundown on the other major deals in the start-up space during the week ended November 10, 2023; apart from XpressBees, which has already been covered in detail.

1. In a major funding round this week, quick commerce player, Zepto raised an impressive $31 million as part of its Series E round funding. The $31 million funding for Zepto came from Goodwater Capital and Nexus Venture Partners. Other investors like Oliver and Lish Jung and Magnum LLC also participated as minor partners in the funding round. Quick commerce is the new growth area in India with the likes of Instamart (an arm of Swiggy), Blinkit (an arm of Zomato) and Dunzo already major players in this space. Zepto is already a unicorn after it had raised its last round of funding worth $200 million at an overall valuation of $1.40 billion. Zepto will use the funds to expand its presence, recruit skilled manpower and to build on its technological stack.

    

2. In another major funding round, EV start-up (Euler Motors) raised a sum of $14.4 million or approximately Rs120 crore. The funding round for Euler Motors saw participation from British International Investment, Green Frontier Capital; apart from existing investors like Athera Venture Partners and ADB Ventures. Euler Motors will use the fresh funds raised to drive its pan India EV ownership drive as it plans a presence in more than 40 cities by the end of 2024. It must be noted that the valuation that Euler Motors got in the latest round of funding is lower than the valuation it got in the previous $60 million funding that it had raised earlier.

    

3. In another significant deal, Moneyboxx Finance, a lending-tech start-up, is raising $9 million or approximately Rs75 crore in funding round from high net worth investors (HNIs), family offices and individual investors. The funds are yet to be raised, but has been included as they are already at an advanced stage of negotiations for the funding. Moneyboxx Finance plans to use the funds to expand its branch network and to fuel business growth. It will also use the capital to shore up its capital base, which is essential for any NBFC to be able to operate and expand in the Indian market. The focus of Moneyboxx Finance is to offer small ticket business loans across rural India.

    

4. Sequeretek has also tied up funding of $8 million during the week to bankroll its expansion in the US and the Indian markets. The funding round was led by Omidyar Networks with participation from the Narottam Sekhsaria family office (promoters of Gujarat Ambuja Cements) and Alteria Capital. Sequeretek has been around for over 10 years and specializes in safeguarding businesses against cyber breaches with their range of proprietary products. This has been raised as part of their Series-A funding round. The company extensively relies on the use of artificial intelligence and machine learning.

    

5. In another significant deal, GoMechanic 2.0 has raised $6 million to expand its footprint and also to launch new products. The $6 million funding was led by a family office whose name has not been divulged. However, it also saw participation from Strides Ventures, which is already an investor in GoMechanic 2.0. The company is an auto spare parts start-up and had been recently acquired as part of a fire sale.

    

6. Varee, a home furnishing, and décor start-up has raised $4 million in funding from Peak XV and Peer Capital. Varee will use the funds to accelerate hiring as well as investing in enhancing the user experience of the customers. It has already grown its offerings to 20,000 products stack and has made more than 150,000 product deliveries in the first year of operation itself. Peak XV (formerly Sequoia Capital) led the funding round with participation from Peer Capital, All In Capital, and Better Capital.

    

7. In a relatively smaller fund raising program, LivSYT, the SAAS (software as a service) start-up, has raised funding of $2.5 million Valley Quad and Inventus Capital. The $2.5 million funding round came as a seed funding round. LivSYT offers easy to adopt SAAS based software designed specifically to cater to contractors, modular manufacturers and third party inspectors. The idea is to accelerate project speed. It will sue the fresh funds to expand into the US market as well as to explore new AI and ML use cases.

    

8. Finally, in another small fund raising round, Quickwork has raised $2.5 million to provide enterprises with a no-code platform to automate workflows. It will be a pre-series A2 funding and was led by DMI Alternative Investment Fund and NIS Ventures group. Quickwork will use the fresh funds to enhance the features of its platform as well as to invest in research and development (R&D). 

The latest week to November 10, 2023 may have been relatively tepid in terms of fund raising compared to the previous six weeks average. However, in terms of number of deals and the breadth of exposure, it has been a busy week for sure.