Weekly Musings – Big start-up updates for the week to February 23, 2024

26 Mar 2024 , 03:16 PM

The start-up funding traction is clearly visible in the latest week, although the collections were relatively lower at $110 Million. What is relevant is that in 6 out of the last 7 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 $125 Million, $168 Million, $48 Million, $170 Million, and $136 Million. In the latest week to February 23, 2024, start-ups raised $110 Million across 15 start-up deals. Once again, the start-up story was dominated by a handful of names in the segment, with a number of large sized deals thrown in. The latest week is affirmation of the start-up ecosystem in India being robust, despite the headwinds coming from big start-up icons like Byju’s and Paytm.

The number of deals in the latest week stood at 15 deals; compared to 18 deals, 25 deals, 8 deals, 13 deals, and 21 deals respectively in the 5 weeks prior to that. That is indicative of a slew of mid-ticket deals in the vicinity of over $6-8 Million on an average. Compared to the average of the last 5 weeks, the start-up funding in the latest week was -14.73% lower. On a month-on-month (MOM) basis the start-up collections were -12.00% lower. Here is the story of start-up fund raising over last 6 weeks; with appropriate comparisons.

Funding Week	Start-up funding raised
Week ending January 19, 2024	$136 Million
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
Average of previous 5 weeks	$129 Million
Week ending February 23, 2024	$110 Million

The start-up funding for the latest week ended February 23, 2024 was slightly lower on a month-on-month basis; and also, lower than the average of the previous five weeks. This bounce can be attributed to the return of confidence post the interim budget, which continues to remain pro-startups. Also, with the global interest rate scenario stabilizing, there is greater willingness on the part of PE funds and VCs to commit fresh investments.

Rentomojo raises $25 Million to cushion its balance sheet

Rentomojo, the furniture rental start-up, has raised $25 Million (₹210 Crore) from Edelweiss Discovery Fund and other investors. Apart from Edelweiss, the funding round also saw participation from Chiratae Growth Fund and Magnetic. The company will use the fresh capital for strengthening the balance sheet to enable business expansion. Rentomojo was founded in the year 2014 and it basically rents out consumer appliances, furniture, and other furnishing products; both through its website and also its mobile app.  through its app and website.

Walko bags $20 Million from Jungle Ventures

Walko, the parent of NIC, the fast growing ice cream brand that is based out of Pune and is quite popular among the local population. The $20 Million funding (₹166 Crore) comes from Jungle Ventures, which is already an early investors in the company. Walko will use the funds to expand its product lineup, strengthen its technology stack and to boost its customer base. It will make the venturing into new ice cream markets in India more rapid. Earlier, even JM Financial had invested in Walko in the year 2021, while Jungle Ventures has already funded Walko in the past. The Indian ice cream market has been growing at a frenetic pace and is likely to expand further with the rapid growth in purchasing power of Indians. 

Yulu raises $19.25 Million to boost its mobility playbook

Yulu, the electrical vehicles (EV) start-up in India has just raised $19.20 Million (₹160 Crore) to strengthen its market leadership position and also to expand the reach of its EVs. The revenues of Yulu are up nearly 5-fold over last year, although it is on a much smaller base. Yulu will use the fresh fund infusion to help fast track its growth plans. The funds were raised from its existing strategic investors viz, investors Magna and Bajaj Auto Ltd. The demand for EVs has been growing rapidly in India and Yulu obviously wants to make hay while the sun is still shining. 

Vidyut gets funding of $10 Million to venture Into EV Insurance

Vidyut has just raised $10 Million (₹83 Crore) from a funding round led by 3one4 Capital. This is part of the Series-A round funding by Vidyut. Apart from 3one$ Capital, other investors who have participated in the funding round include names like Zephyr Peacock, Saison Capital, Force Ventures, Alteria Capital, and Udaan CEO Sujeet Kumar; in his personal capacity. Vidyut now wants to focus on the other aspects of enhancing EV ownership experience. For now, it will focus on EV insurance and resale. Vidyut will also the funds to expand its presence across 40 Indian cities from the current level of 25 cities. The funding round was a mix of equity and debt capital raising.

Samunnati bags $9 Million in debt from Impact Investment Exchange

Samunnati has just raised $9 Million (₹75 Crore) through the debt route. Against the funding, Samunnati will be allotting 7,506 debentures to Impact Investment Exchange as consideration for this transfer of shares. Samunnati will use the fresh funds to give loans to farmers in order to empower them to increase their income and adopt climate-friendly agriculture practices. Samunnati works at both ends. On the one hand, the company offers market linkage to agricultural enterprises & small producers and customised financial solutions to farmers. Impact Investment Exchange is based out of Singapore. Samunnati has to repay the entire debt within four years with 12.7% interest per annum.

Varaha, the climate tech start-up, raises $8.7 Million

Climate Tech Startup Varaha has just raised $8.7 Million (₹72.10 Crore) to help the company reduce its carbon emissions in farming practices. Just last year, Varaha had raised $4 Million in a funding round led by Orios Venture Partners.  Varaha will use the fresh funds raised to improve its technology and science capabilities. It is also looking to expand its operations in a big way across Asia and Sub-Saharan Africa. It will also empower trading in carbon credits. Apart from Omnivore and Orios, which led the current funding round. It also had capital participation from  Norinchukin Bank of Japan, AgFunder and Octave Wellbeing Economy Fund.

PURE EV raises $8 Million to scale up its EV two-wheeler playbook

PURE EV has raised $8 Million (₹66.3 Crore) as part of its Series A1 funding round. The participants in the funding round included Bennett Coleman and Company (Times of India group), Hindustan Times Media Ventures, and Ushodaya Enterprises (Priya Pickles) and others. Its overall A1 funding round is worth $25 Million. PURE EV will be rapidly expanding its pan-India sales network from 140 to 300 dealers in next 6 months. The company had recently launched a new electric motorcycle, capable of doing over 200 KM range power per charge. PURE EV already has over 120 IP filings. PURE EV has sold over 70,000 vehicles through a network of over 140 outlets, with its key markets being India and Southeast Asia. 

PlayShifu raises $6 Million to enhance its product portfolio

PlayShifu, the toys and gaming start-up, has just raised $6 Million (₹50 Crore) to expand its product portfolio. The funding round for PlayShifu was led by Inflexor Ventures and it saw additional participation from Chiratae Ventures, Bharat Innovation Fund, and Athera Ventures Partners. Apart from boosting its product portfolio, PlayShifu will also use the funds to enhance its distribution network, which is what remains the missing link. PlayShifu was founded in the year 2016 to sell games and toys which help kids build foundational skills. These pertain skills like critical thinking, engineering and geography. 

Ghost Kitchens gets $5 Million to expand its restaurant franchise 

Ghost Kitchens raised $5 Million (₹41 Crore) in funding to scale up its business rapidly and also to foray into retail stores for pushing its brands. Ghost Kitchen, which was founded in the year 2019, operates a platform offering a virtual restaurant network for food businesses. Its current network includes 15 self-owned and operated cloud kitchens in Mumbai and Ahmedabad. In addition, it also boasts of more than 1,200 internet restaurants across 40 cities in India. The funding round was led by GVFL (Gujarat Venture Finance Ltd), with participation from NB Ventures, LetsVenture and Lead Angels. At a personal level, even popular Telugu star; Rana Daggubati also participated in this funding round. 

Auto VRSE gets $2 Million funding from Lumikai

He $2 Million (₹16.6 Crore) funding for Auto VRSE comes from Lumikai and is structured as seed funding. Participants in the funding round included TensorFlow, Inference.io, and Yash Kotak, founder of Jumper.ai. Auto VRSE will use the fresh funds to enhance its foundational enterprise product, VRSE-Builder. The company will also use the funds to foray into the United States and also to expand its product stack and its team size. Auto VRSE, as the name suggests, is specialized provider of Virtual reality (VR) and augmented reality (AR) services to customers. This was part of the seed funding round of the company. Auto VRSE actually builds customised VR/AR application for enterprises looking to its customers. 

Finally, some, mega fundings on the anvil.

The above were the major funding round themes for the week gone by. However, there were also some potential funding talks of a relatively large size. The first deal is about Mubadala if Abu Dhabi, Kotak, and Avendus laying plans to infuse ₹1,100 Crore into education funding company, Avanse. The company is currently owned predominantly by Warburg Pincus. Avanse is India’s second largest domestic private sector NBFC which operates exclusively in the education loan segment. The company, essentially, offers credit for post-graduate students and academic institutions.

In another round of controlled fund raising, Infra.Market also plans to raise debt, over the next few years. This comes just after Infra.Market had recently raised $12 Million in debt. What we know about the macros is that they now plan to raise $60 Million (₹500 Crore). The company will be raising this capital in multiple tranches over next two months.