Weekly Musings – Big start-up updates for the week to November 17, 2023

20 Nov 2023 , 11:19 AM

Compared to the previous week, the current week saw flows into start-ups fall very sharply. Last week, there were big names like XpressBees and Zepto in the previous week. For the week to November 17, 2023, the start-up funding at $44 million was 72.3% lower than the previous week at $159 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 82.9%, 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 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
Week ending November 10, 2023	$159 million
Average of previous 5 weeks	$257 million
Week ending November 17, 2023	$44 million

The start-up funding for the latest week ended November 17, 2023 was sharply lower on a week-on-week basis and also sharply 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 Bakingo, Slice, Inito, CoverSelf, General Autonomy and others; across a total of 10 deals. Let us now move to the actually break-up of the start-up funding in the latest week.

Week was dominated by the Bakingo funding

The week to November 17, 2023 was largely dominated by the Bakingo funding; but there was not really much you could witness in a week when the total fund raising by start-ups itself was just about $44 million. Bakery start-up, Bakingo, in the largest single deal of the week, bagged funding to the tune of $16 million, accounting for more than 35% of the total start-up fund raising for the week. Bakingo will use the funds to expand its presence across India. Bakingo, which was incorporated in the year 2016 offers a wide variety of cakes and desserts. 

It has a total of more than 100 SKUs (stock keeping units), with its most popular items being the signature cheesecake, gourmet cakes and jar cakes. Bakingo will use the fresh funds to expand its all India presence. It will look to also strengthen its distribution footprint and will also double its dark kitchens from the current 75 to 150. It will also be foraying into 10 new cities in India. The funding came from private equity firm, Faering Capital and post the transaction, Sameer Shroff, the co-founder of Faering Capital will also join the board of Bakingo. It will also look to open EBS (exclusive brand stores) so that the customers can get a first-hand experience of the products.

Where the major funding deals came during the week

For the week ended November 17, 2023 the start-ups saw fund raising of $44 million across a total of 10 deals. This was dominated by $16 million raised by Bakingo from Faering Capital, which has already been covered. Here is a quick rundown on the other major deals in the start-up space during the week ended November 17, 2023.

1. In a major funding round this week, Fintech unicorn Slice, has secured $9 million in debt funding from Strides Ventures. In exchange for this stake, Slice will allot 7,500 NCDs to Strides Ventures at an issue price of Rs1 lakh per share. The debt funding could eventually be four times higher than the current round at around $35 million. In June 2022, Slice had raised $50 million in Series C funding from Tiger Global. It may also be recollected that Slice had merged with North East Small Finance Bank (SFB) a little over a month ago. The non-convertible debentures (NCD) issued by the company will carry an interest of 14.25% on the principal amount. The company also seeks to use the funds to expand its footprint and also to invest in the technology stack and also integrate advanced technology solutions into their offering.

    

2. In another major funding round, CoverSelf has got $8.2 million in funding from BEENEXT and 3one4 to streamline its healthcare claims and payment systems. CoverSelf was founded in the year 2021 as a collaborative SAAS platform to simplify healthcare claims and payments. The company will use the fresh capital raised to expand and grow its operations. In addition, the company will also use the funds to invest in manpower, marketing and in the technology stack. It will also use the funds to develop and nurture generative AI capabilities. Both BEENEXT and 3one4 are existing investors in CoverSelf.

    

3. In another significant deal, Inito has raised $6 million from Fireside Ventures during the week to fuel the expansion of its at-home diagnostic solutions. Inito was founded in the year 2015 and it basically offers tools for at-home health check-ups and health management. It will use the fresh funds to support the global expansion of its hormone test facility, create tools for advanced analytics using artificial intelligence (AI) and to invest in R&D for new tests. The company had previously raised $9 million from Y Combinator Ltd. This $6 million funding in the latest round comes in the form of Secured Series-A funding.

    

4. General Autonomy, the robotics start-up, has raised $3 million to explore how to leverage robotics to modify the future of factories in India. The funding came from India Quotient, Elevation Capital, and a handful of angel investors. The founders of General Autonomy were previously the directors of ShareChat. Their current venture will look to use robotics to automate the toughest parts of the workflows in the factory. 

Finally, in an interesting move, Paytm has been included in the Morgan Stanley Capital International (MSCI) Global Standards India. The inclusion in the MSCI index comes as a blessing in disguise for Paytm as now even passive funds would be looking to create value to the shareholders. The MSCI indices remain the benchmark for trillions of dollars parked in passive funds to look at big opportunities in this space.