Weekly Musings – Big start-up updates for the week to March 01, 2024

4 Mar 2024 , 11:16 AM

The start-up funding traction picked up in a big way in the latest week with a sharp spike in collections at $381 Million. This is the best weekly collection figure for start-ups in year 2024. Just 4 start-ups accounted for 73% of the total fund raising in the week, resulting in a number of big ticket deals during the week.  What is relevant is that in 7 out of the last 8 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 $ 110 Million, $125 Million, $168 Million, $48 Million, and $170 Million. In the latest week to March 01, 2024, start-ups raised $381 Million across 27 start-up deals. The latest week is affirmation of the start-up ecosystem in India being robust, with recent macro data underlining this India advantage.

The number of deals in the latest week stood at 27 deals; compared favourably with 15 deals, 18 deals, 25 deals, 8 deals, and 13 deals respectively in the 5 weeks prior to that. That is indicative of a slew of big-ticket deals in the vicinity of over $10-15 Million on an average. Compared to the average of the last 5 weeks, the start-up funding in the latest week was 207.25% higher, representing a quantum leap. On a month-on-month (MOM) basis the start-up collections were 246.36% higher. Here is the 6-weel start up story of India Inc.

Funding Week	Start-up funding raised
Week ending January 26, 2024	$170 Million
Week ending February 02, 2024	$48 Million
Week ending February 09, 2024	$168 Million
Week ending February 16, 2024	$125 Million
Week ending February 23, 2024	$110 Million
Average of previous 5 weeks	$124 Million
Week ending March 01, 2024	$381 Million

The start-up funding for the latest week ended March 01, 2024 was sharply higher on a month-on-month basis; and also, sharply higher than the average of the previous five weeks. This bounce can be attributed to the return of confidence post the interim budget, and the GDP data. Also, with the global interest rate scenario stabilizing, there is greater willingness on the part of PE funds and VCs to commit fresh investments into India.

Shadowfax raises $100 Million to expand last mile delivery services

Logistics service provider, Shadowfax, has raised $100 Million (₹829 Crore) with private equity major TPG NewQuest leading the funding round. However, the funding round also saw participation from Mirae Asset Venture Investments (India), Flipkart, IFC, Nokia Growth Partners, Qualcomm, and Trifecta Capital. This round also gave an exit to Eight Roads Ventures, on of the early investors in Shadowfax. This is part of the Series-E round of funding, which is being conducted in several tranches. The last round of funding was raised by the company at an indicative valuation of $632 Million. 

Capillary raises $95 Million in second round of Series-D

Capillary, the customer loyalty, and engagement solutions player, has raised a sum of $95 Million (₹787 Crore) in the second round of Seies-D fund raising. In its first Series-D round, Capillary had raised $45 Million back in June 2023. Out of the $95 Million raised in the second round of Series-D funding, Capillary plans to set aside $20 Million for its ESOP program. The funds will be used to fuel Capillary’s artificial intelligence (AI) initiatives to generative loyalty, accelerate global expansion, and strengthen its position as a torch bearer in this space. The company saw an array of investors participating in the found. The company provides these solutions on the SAAS model.

NewSpace pockets $52 Million funding for spurring defence innovation

NewSpace has raised $52 Million (₹431 Crore in a bridge round of funding through a mix of debt and equity. Out of the $52 Million raised, $33 Million was raised by way of equity and the balance $19 Million was raised via debt. While the equity funding came from its leading existing investors, the debt funding round came from the SBI startup hub and SIDBI. It may be recollected that NewSpace had raised $21 Million in its first round in February 2022. NewSpace is a leading drone manufacturer for the defence sector in India, where the government is looking to substantially outsource its product orders to domestic players.

D2C jewellery brand, Kushal’s, gets $34 Million from Lighthouse

Kushal’s, the direct to consumer (D2C) jewellery brand has just raised $34 Million (₹284 Crore) in a Series-B round of funding from Lighthouse. It is a venture fund that specializes in late stage funding. Kushal’s was founded in the year 2006 by Manish Gulechha, Nandish Gulechha, and Kalpesh Gulechha to design and manufacture fashion jewellery for special occasions. This round of funding will also provide an institutional exit to India SME Investments, which had invested ₹15 Crore in the business in the year 2019. The company aims to use the funds raised in this round to open about 300 to 400 stores across India in the next four to five years. It also plans to be fully geared for its IPO in the next six years.

Zeno Health gets $25 Million to boost omnichannel pharmacy play

Zeno Health, an omnichannel platform to sell generic drugs, has just raised $25 Million (₹207 Crore) from the South Korean PE firm, STIC Investments. The funding round also saw participation from existing investor, Lightbox. Zeno Health will use the fresh funds to scale up growth and expand the footprint across India. Part of the monies will also be invested in technology infrastructure and for improving the tech stack. This is a Series-C round of funding. The company also plans to deploy this capital for brand building and coming up with innovative solutions for the diverse markets in India. 

MSWIPE bags $20 Million from Alpha Wave Ventures

MSWIPE has raised $20 Million (₹165 Crore) immediately after getting the payment aggregator license from the RBI. The fresh capital will be used to develop an in-house online payment gateway and offer full-stack payment solutions. It may be recollected that only last year, MSWIPE had expanded its services to the UAE. The fresh funds will be also used to expand its merchant payment network and also to improve upon its tech stack. Apart from Alpha Wave Ventures, there were also other existing investors who participated in this funding round for MSWIPE. 

Mokobara nets $12 Million in a funding round led by Peak XV

Mokobara, the domestic luggage brand, has just raised $12 Million (₹100 Crore) in a funding round led by Peak XV. Mokobara was founded in the year 2020 by Sangeet Agrawal and Navin Parwal to manufacture luggage and travel accessories. Overall, the company has already raised $20 Million including the latest round of funding. The company has seen impressive 4-fold growth in operating income over the last year. Mokobara is based out of Bengaluru and it has adopted an omnichannel approach to selling its luggage products. It already runs multiple stores across Bengaluru, Delhi, Mumbai, and Pune, and is planning to open 25 more stores by the start of next fiscal FY25. The funding round values Mokobara at nearly $80 Million based on indicative valuations. 

Digantara gets $12 Million funding from Aditya Birla Ventures and SIDBI

Digantara, the SpaceTech start-up, has just raised $12 Million (₹100 Crore) in funding from Aditya Birla Ventures and SIDI. In the first round, Digantara had raised $10 Million from Peak XV Partners in June 2023. Digantara was founded in the year 2018 by Anirudh Sharma, Rahul Rawat and Tanveer Ahmed. The company is currently working on building a sustainable space ecosystem and is focusing on developing a space debris detector. This is part of the Series-A1 round of funding which has just been completed by the company. The funds will be used to invest in technology, getting the right personnel and also in improving its technology stack in the current SpaceTech business.

Cult.fit nets $10 Million from Valecha Investments and others

Cult.fit has just raised $10 Million (₹83 Crore) from Valecha Investments with participation from Extreme Brands LLOP and L&K Wellness Services. The company was founded in the year 2016 and offers a complete gamut of fitness services including offline group workouts at Cult.fit centres. In addition, it also offers other gym-based workouts. The company has seen its operating revenues triple in FY23 over the previous year, even as its losses have narrowed. In exchange for the funds raised, Cult.fit allotted 7.5 Lakh Series-F compulsory convertible preference shares (CCPS) to Valecha Investments. The company also has Gul Advani as an investor in his personal capacity. 

QubeHealth to raise $9 Million for launching healthcare app

QubeHealth plans to raise $9 Million (₹74 Crore) from undisclosed investors for launching its healthcare app. This round is yet to be closed. Incidentally, QubeHealth is a B2B2C start-up offering a payment system and healthcare credit line to employees having group health insurance policy provided by their employers. Their proposed app will be launched as part of the generic app marketplaces and will offer healthcare solutions to users, which include connecting with doctors, locating clinics, etc. This will be part of the Series-A round of funding for the company. 

Smart Joules bags $8 Million debt funding from IFU, Denmark

Smart Joules has just raised $8 Million (₹66 Crore) in debt from IFU of Denmark. The start-up will use these debt funds to offer B2B cooling solutions. The company will be specifically using these funds to execute its pipeline of cooling-as-a-service partnerships with healthcare and hospitality chains. Smart Joules is a pioneer in the industry in offering cooling as a solution (CAAS) services to customers in order to make the offering energy efficient and also economical in terms of costs. According to the company, Smart Joules has helped save 23 Crore KWH (kilowatt hours) of energy since its inception. This translates into ₹181 Crore of saving in energy costs and 1.60 Lakh tonnes in carbon emissions. The IFU of Denmark is an investment fund sponsored by the Danish government for developing countries. 

IntrCity secures $4.4 Million in funding to grow traveller base

The start-up has just raised funding of $4.4 Million (₹37 Crore), which will be used to enhance product offerings and to foster accelerated user acquisition for growth. This funding will also allow the company to offer more to the existing traveller base. IntrCity has partnered with over 30 bus operators across India and it covers more than 650 Tier-2 and Tier-3 routes across India. This is part of the Series-C round funding and was  led by Mirabilis Investment Trust, with participation from the Nandan Nilekani family trust (NRJN), Omidyar Network India and US-based Ujamaa Ventures; all of whom are existing investors. 

Silence Labs nets $4 Million to help businesses with data privacy 

Privacy tech startup, Silence Laboratories, has just raised $4 Million (₹33 Crore) in a pre-Series-A funding round. The funding round was led by Pi Ventures and Kira Studio, while a clutch of angel investors has also participated in the venture. The start-up was founded in the year 2021 by Jay Prakash and Andrei Bytes as a cybersecurity provider offering a wide array of solutions including digital assets, traditional finance, healthcare, and more. The company will use the funds to transform privacy-preserving authorisation and collaborative computation. They will also invest in R&D and scale up its technology stack as well as its business teams. Their solution will necessarily assure deletion of data after usage. 

Finally, some smaller deals for the week

The week also saw an array of smaller deals of start-ups raising funds from PE investors, albeit to a smaller extent. 

1. Zvolv raises $2 Million to offer no-code automation solutions. Funding round was led by Silverneedle Ventures with participation from JSW Ventures and others. It will use the capital raised to ramp up deployment of GenAI tools and expand its US footprint. 

    

2. Farmtheory, the Agritech start-up has raised $1.45 Million in seed capital  to reduce food wastage and boost farm  yields. The fund was raised from Merak Ventures and will be used to enhance farmer incomes by addressing food losses. 

    

3. Finally, TWF Flours gets funding of $1.40 Million from Rainmatter Capital to offer nutritional flour to buyers. It will use the funding to scale up its R&D initiatives and hire new talent. Its new milling technology ensures maximum amounts of micronutrients.