Indian startups raised more than $1 Bn in May: Entrackr Report

Indian startups went past the $1 billion funding mark in May after a sharp fall in the previous month. Like April, the top five companies in the list contributed to more than half of the total fundraise in May.

Data compiled by Fintrackr shows that 91 startups managed to raise $1.01 billion in May. This is a minor jump of 2% from $990 million from the previous month. Growth and late stage startups managed to mop up $756 million across 16 deals while early stage startups bagged $255 million across 63 deals; whereas 12 startups did not disclose their transaction details.

[Month-on-Month trend]

January saw 101 deals amounting to $1.1 billion which fell to $859 million in February and ended the first quarter with an up tick to $1.3 billion in March only to fall below $1 billion in April. The month-on-month trend for the past five months can be seen below:

[Top 10 growth stage deals]

In the top 10 growth stage deals, Byju’s, PhonePe, Atomberg, Chalo and Ripplr grabbed $250 million, $100 million, $86 million, $45 million and $40 million respectively.

E-commerce solutions provider Ace Turtle, SaaS startup Pando, data analytics company Course5 Intelligence, gaming company Nodwin and SaaS firm THB were in the top 10 list.

[Top 10 early stage deals]

Agilitas Sports, a new startup floated by Abhishek Ganguly, a sports business leader, along with co-founders Atul Bajaj and Amit Prabhu, has scooped up $52 million in its maiden fundraise. This was followed by EV ride-hailing service and EV charging solutions provider BluSmart which raised $42 million in funding in Series A round.

Financial services and infrastructure company XFlow, Cross-border logistics company Agraga and Cryptocurrency platform Aqex raised $10.2 million, $8.4 million and $7.5 million respectively.

[Segment and city wise deals]

SaaS leads the pack in terms of number of deals in May. These companies raised over $62 million across 11 deals. However, edtech remained on top when it came to the amount raised as Byju’s received $250 million in debt. Last month, 9 fintech companies mopped up $128 million. EV and AI were next on the list.

City wise, Bengaluru leads the chart with 41 deals followed by Delhi NCR and Mumbai with 16 and 14 deals respectively. Hyderabad and Ahmedabad were in the top five funding deals.

[Stage wise deals]

May saw 24 seed funding whereas 10 deals were in the pre-seed stage. This was followed by pre-Series A and Series A where 17 and 6 startups got funded respectively. In growth and late stage deals, Series B, Series C and Series D saw 5, 3 and 1 deals respectively.

[Mergers and Acquisitions]

There were 10 mergers and acquisition deals in May against 15 in April. While the deal size of most of the acquisitions remains undisclosed, there were few notable deals in the last month. The acquisition of majority stakes in Trillion Loans by BharatPe, FinFont Infotech LLP by Yubi and Pepcoding by Scaler in the spotlight.

[Layoffs]

As per data compiled by Fintrackr citing various media reports, over half a dozen startups went through layoffs impacting nearly 700 employees. E-commerce company Meesho was on top with 250 employees receiving pink slips followed by Cuemath, Teachmint and Toothsi. Last month, 12 startups laid off part of their staff.

[Conclusion]

There have been a lot of crests and troughs with this year’s funding trends. But largely, the theme has remained the same: conservative approach to funding by investors with cost-cutting among most companies to extend their runway. In May, too, even though the funding amount went up, it was marginal and mainly contributed by the top five fundraisers. That said, the number of smaller size deals seem to be roughly similar to 2021, when the ecosystem saw a funding high — indicating that investors are comfortable making smaller bets in this environment.