VC fundings slump 25% year-on-year in April-June quarter, says Venture Intelligence

Venture Intelligence

Amidst a recent launch of funds when the startup industry was expecting increase in Venture capital investments, Venture Intelligence data has presented a conflicting report. It said that VC investments slid 25 per cent year-on-year to 78 deals worth $275 million during the April-June 2017 quarter. The investment activity was lower 7 per cent sequentially.

The April-June 2016 quarter saw 104 investments worth $309 million. However, the January-March 2017 quarter fell to 84 deals worth $349 million. In the recent quarter, the largest VC investment was Sequoia Capital’s $20-million commitment to shared office space provider Awfis.

IT & ITeS companies, which were once the apple of investors’ eyes, witnessed a 33 per cent down in y-o-y investments compared to last year. This year, the number of investments fell to 54 worth $180 million.

Besides, some of the individual tech companies which bagged the prominent investments in April-June quarter were from e-commerce, insurance and logistics and education.

E-commerce search software company Unbxd bagged $12.5 million from investors, including Eight Roads Ventures. Insurance marketplace Coverfox bagged $11 million from existing SLOW investors in a round led by US insurer Transamerica. Other notable deals were logistics tech-firm Fortigo’s $10 million from Accel India and ex-UIDAI chairman Nandan Nilekani, and edu-tech company Unacademy’s funding from Sequoia and SAIF Partners.

The financial sector in total attracted 4 investments worth $25 million this quarter with the top deals being the $18 million bagged by OneAssist and $5.5 million by Ummeed Housing Finance.

The Venture Intelligence report reflects a more formidable picture for early-age and late-age startups. According to the report, seed rounds witnessed a 53 per cent fall in Q2 2017 to 22 transactions, compared with the 47 deals inked for the comparable period last year.

However, at a time, when startups saw a slump in Seed funding, Series A rounds were the only category to witness a 15 per cent rise in Q2 2017 to 39 transactions. Bengaluru-based startups continued to top the funding charts attracting 26 investments during Q2 2017 despite a downtick from the 32 investments in the same period year ago.

Despite lower numbers, VCs are positive about the investment climate. “Going by anecdotal evidence, we are seeing a distinct rise in investor appetite, across early stage ro unds. Many inOING vestments made several months ago haven’t been announced revealed yet, for several reasons. There is reason to believe that momentum will carry through rest of 2017 and into 2018,” said Shubhankar Bhattacharya, venture partner, Kae Capital as reported by the ET.

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