Weekly Musings – Big start-up updates for the week to April 12, 2024

15 Apr 2024 , 10:35 AM

START UP STORY OF THE WEEK

The start-up funding story continued its momentum in the latest week to April 05, 2024, albeit to a more subdued level of $105 Million in the week. This is lower than the previous week and also lower than the average of the last 5 weeks. That is more due to the businesses getting adjusted to the new fiscal year and also the uncertainty over the Fed monetary policy. There were several important deals in the week, like Sprinto, Neysa and Aviom. There were 2 deals that have not been included in the count. The $200 Million funding of IBUS by the NIIF has not been included being more of a generic funding in nature.

Similarly, the $170 Million funding of Flipkart Internet has also not been included, being an inter-group funding deal. In 11 out of the last 12 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 #152 Million, $243 Million, $205 Million, $226 Million, and $150 Million. In the latest week to April 12, 2024, start-ups raised $105 Million across 21 start-up deals, with Sprinto and Neysa dominating the funding story in the week.

NUMBER OF DEALS AND FUND RAISING

The number of deals in the latest week stood at 21 deals; compared with 22 deals, 17 deals, 14 deals, 18 deals, and 17 deals; 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 -46.15% lower. On a week-on-week (WOW) basis the start-up collections were -30.92% lower. EnterpriseTech continued to be the dominant theme for the week.

Funding Week	Start-up funding raised
Week ending March 08, 2024	$150 Million
Week ending March 15, 2024	$226 Million
Week ending March 22, 2024	$205 Million
Week ending March 29, 2024	$243 Million
Week ending April 05, 2024	$152 Million
Average of previous 5 weeks	$195 Million
Week ending April 12, 2024	$105 Million

The start-up funding for the latest week ended April 12, 2024 was lower on week-on-week basis and also lower than the average of the previous five weeks. The $105 Million of fund raising in the week were divided into $55 Million of late stage funding and $50 Million of early stage funding. If one looks at the fund raising sectorally, the week saw funding across ecommerce, fintech, SAAS, Deeptech, and EVs. Bengaluru raked in the greatest number of deals in the week, followed closely by Mumbai and Delhi / NCR. Now for the deals.

IBUS gets $200 Million funding from NIIF

The national Investment and Infrastructure Fund (NIIF) has infused $200 Million (₹1,658 Crore) into IBUS, which is a digital solutions provider. However, this deal has not been included int eh total funded deals as it does not come from a venture fund or a P/E fund and this is more like a blanket fund rather than a fund aimed at the end-user. Post the fund infusion, the NIIF will hold a significant majority stake in IBUS. Incidentally, IBUS was founded in the year 2013. The company is a private limited company and it helps build digital infrastructure solutions. In addition, IBUS also deploys cellular and Wi-Fi connectivity at IT parks, airports, hospitals, among others. This is more of a generic blanket funding that IBUS has received as part of the longer term partnership. This funding deal has not been included in the deal count or the funding count for the week.

Flipkart Internet gets $170 Million from Singapore parent entity

This is another mega deal that has not been included, either in the deal count or the funding count for the week. That is because, the funding again came from a group entity, which is normally not included in funding deals, which are supposed to be arms-length deals to get included in this list. Flipkart Internet got funding to the tune of $170 Million (₹1,421 Crore) from its Singapore based parent entity. The transfer of funds to help Flipkart Internet to deepen its franchise, has been delivered in 2 tranches in March and in April. It may be recollected that even recently, the Singapore based parent entity had infused funds into Flipkart to bankroll its growth plans. The total funding received by Flipkart India in the last 2 tranches amount to $281 Million.

Sprinto raises $20 Million to automate enterprise compliance

In a Series-B round of funding, Sprinto has raised $20 Million (₹166 Crore) from a slew of private equity investors. The Series-B funding round was led by Accel Partners with participation from Elevation Capital and Blume Ventures. Both Elevation and Blume are already existing investors in Sprinto. The start-up, Sprinto, is planning to use the fresh capital for research & development (R&D), wherein the primary focus would be on intelligent automation and artificial intelligence (AI) with a view to expanding its footprint to new markets. Sprinto was founded in the year 2020 by Girish Redeker and Raghuveer Kancherla to assist in enterprises risk automation and compliance requirements. The Sprinto currently works with cloud setup and helps enterprises monitor entity-level risks and controls from a single dashboard. It also has a module to protect companies from cyber risks.

Neysa raises $20 Million to accelerate GenAI adoption For enterprises

If generative artificial intelligence (Gen-AI) is the in-thing, then Neysa is surely at the forefront of this new trend. Neysa has just raised $20 Million (₹166 Crore) from a clutch of investors including Matrix Partners India, Nexus Venture Partners, and NTTVC. Neysa plans to deploy these fresh funds to expand its Gen AI-cloud platform-as-a-service (PAAS) offerings. In addition, the funds will also be used to boost observability tools for the Indian and global markets. Neysa was founded only in 2023 and currently provides a gamut of generative AI (artificial intelligence) platforms and services which are targeted at assisting clients in overseeing their AI projects. With the fabulous success of Chat GPT and similar platforms coming from the biggest names in the world, it has opened up a window of massive opportunities for smaller start-ups to service unique niches in this space.

Recykal bags funding of $13.2 Million from 360-One Asset Management

Waste Management Startup company, Recykal, has got $13.2 Million (₹110 Crore) funding from 360 One Asset Management, part of the India Infoline group. It was a mix of primary and secondary funding as the deal also gave exit to some of the early investors in the company. Incidentally, Recykal was founded by Abhay Deshpande in the year 2016 and is based out of Hyderabad. Recykal offers cloud based solutions to clients to enable transparent and traceable material flows in waste. The infusion of funds will help the company to drive further innovation in technology, products, and solutions.

Housing finance company, Aviom HFC Raises $10 Million in Debt

Aviom Housing Finance Company (HFC) has raised $10 Million (₹83 Crore) as debt from the Blue Orchard Microfinance Fund. Aviom HFC is based out of the Delhi NCR region and is into the business of giving small ticket loans to fund homes. This fund round from Blue Orchard Microfinance comes in the form of debt funding. In exchange for the debt funds raised, Aviom HFC will issue a total of 1,000 bonds to Blue Orchard Microfinance Fund with a tenure of 72 months. This is a pure debt funding component and there is no equity portion or equity dilutive provision in this deal. Aviom HFC was founded by Kakal Ilmi in the year 2016 to offer home loans to low income households from across the country.

Axio raises $6 Million debt from Alteria Capital

Digital lending company, Axio has raised $6 Million (₹50 Crore) from Alteria Capital in the form of debt. Axis is a company that gives out loans entirely via digital mode, with the entire process from due diligence to execution to servicing done digitally. The debt will be used by Axio to boost its capital base and use that to on-lend more to the potential customers of the digital lender. Currently, Axio has serviced about 15 Million customers till date, of which 9 Million are credit customer for its lending products. In its previous funding round, Axio had raised a sum of $50 Million from a clutch of key investors including Lightrock India, Peak XV (formerly Sequoia Capital India), Ribbit Capital, and others.

Planys gets $5 Million in a funding round led by Ashish Kacholia

Planys has just raised $5 Million (₹43 Crore) from a clutch of investors in a funding round led by noted Indian equity investor, Ashish Kacholia. The company is a deeptech company which plans to use the funds to offer underwater infrastructure testing solutions on behalf of companies with oil and gas assets. Planys will put in motion advanced plans like the use of marine robotics, underwater testing, and digital analytics and reporting platforms. Planys was founded in the year 2015 by IIT Madras alumni. Some of the faculty members were also part of this project. Planys is already reportedly working with large industry players like Reliance Industries, Indian Oil Corporation, BPCL, Dedicated Freight Corridor, and Indian Railways. Ashish Kacholia is one of the leading angel investors in the Indian start-up space.

Autonxt Automation bags $3 Million in round led by Saama Capital

One of the rapidly emerging Electric Tractor Startup company in India, Autonxt Automation  has just got funding of $3 Million (₹25 Crore). The funding round was led by Saama Capital and others. The fresh proceeds will be used by the company to fast-track the engineering efforts of Autonxt Automation to emerge as a dependable and global mobility platform. One of the big trends that Autonxt Automation is betting on is that electric tractors have operating costs that are nearly one-fifth that of diesel tractors. This would enable the tractor owners to break even in under two years. The product is still under testing and it will be India's first electric, self-driving tractor to hit the EV market in India.

Arrivae gets $2.5 Million funding to offer interior design solutions

Arrivae has just bagged funding from Mithun Sancheti to the tune of $2.50 Million (₹21 Crore) in order to offer interior design solutions to its customers. Arrivae will use the fresh proceeds to expand its distribution capabilities and also to invest in its technology stack. In addition, this will enable the company to penetrate deeper into existing markets and boost its existing supply chain. Incidentally, Madhu Kela (of Reliance Mutual Fund fame) is already a director on the board of Arrivae. Yash Kela, the founder of Arrivae, is the nephew of Madhu Kela and has been a key part of the Kela family office, Singularity Ventures.

Age Care Labs gets $1.20 Million funding from SIS

Age Care Labs has secured funding to the tune of $1.20 Million (₹10.13 Crore) from SIS, one of the leading security firms in India. SIS is a listed entity. In exchange for this fund infusion, SIS has picked up a 4% stake in Age Care labs, which values the start-up at around ₹254 Crore. Age Care Labs was founded in the year 2019 to offer services such as health and emergency support to elders in the comfort of their own homes.

Overall, the start-up funding scene was relatively subdued in the week to April 12, 2024. This could be attributed to the ambivalence of the Fed on the issue of timing of interest rate cuts. However, the interest in the week was across late stage and early stage funding.