Investments in Indian startups reached a new height in May as the total funding influx crossed the $1.3 billion threshold. The surge can be attributed to Google-Flipkart’s $350 million deal, a couple of $100 million plus rounds, and several growth stage fundings.
Indian startups mopped up $1.34 billion across 128 deals in May, according to data compiled by startup data intelligence platform TheKredible. This included 39 growth-stage deals worth $1.19 billion and 66 early-stage deals amounting to $154 million. There were 23 undisclosed rounds, primarily early-stage deals.
The Indian startup ecosystem produced its last unicorn in March with Perfios entering the coveted club. Moreover, the total number of new unicorns in the ongoing calendar year stood at two with Bhavish Aggawal-led AI startup Krutrim being the first one.
[Month-on-Month and Year-on-Year trend]
The funding in May saw a nearly 29% month-on-month jump from a little over $1 billion in April. On a year-on-year basis, May 2024 also saw a 32% jump from $1.01 billion in May 2023. Since January, homegrown startups have raised over $5.1 billion which is likely to reach $12 billion by the year end. In 2023, the total funding in startups stood at $11.3 billion.
[Top growth stage deals]
E-commerce marketplace Flipkart raised $350 million in equity funding from Google and stood at the top followed by SaaS firm Atlan’s $105 million Series C round and healthtech startup NephroPlus’s $102 million Series F round.
D2C performance wear brand TechnoSport and fast fashion brand Libas raised their maiden fundraise (Series A) worth $21 million and $18 million, respectively. However, both brands are more than a decade old and they are included in growth/late-stage deals.
The top 10 list also includes NBFC startup Annapurna Finance, B2B e-commerce unicorn Infra.Market, EV startups Battery Smart, GreenCell Mobility, and Ather Energy, edtech firm K12 Techno, and fintech company Propelld.
[Top early-stage deals]
Agritech startup Superplum which raised $15 million in Series A was on top among early-stage deals followed by UnifyApps which scooped up $11 million in seed funding.
Soleos Solar Energy, Vegapay, Turno, DiFacto, Celcius Logistics, Flam, CoverSure, and Fyllo made it to the top 10 list of early-stage deals.
[City and segment-wise deals]
City-wise, Bengaluru-based startups remained on the top with 52 deals, contributing around 60% of the overall funding in May. Delhi-NCR and Mumbai followed with 33 and 14 deals, respectively. The list further counts Hyderabad, Chennai, Ahmedabad, and Kolkata, among others.
Segment-wise, e-commerce startups (including D2C brands) led the show followed by fintech with 25 and 20 deals, respectively. SaaS, agritech, and healthtech were next on the list. Visit TheKredible for more details.
[Stage-wise deals]
Series-wise, 47 startups raised funding in the Seed and pre-seed round followed by 19 Series A deals, 19 Pre-Series A, and 11 Series B deals. Debt-only funding contributed $155 million or 11.6% of the overall venture funding across deals.
[Mergers and acquisitions]
Indian startups saw eight mergers and acquisitions in May, a slight slump from nearly a dozen deals in April. While most of the deals were undisclosed, the acquisition of Device42 by Freshworks in a $230 million deal stayed on top of the list. UGRO Capital took over MyShubhLife in a $5.3 million deal.
The notable list of M&A also includes the acquisition of LogiTax by Cashflo, SocialBoat by Noise, CosmoGenesis Labs by MamaEarth, Zenifi by BharatX, and the merger of Kites Senior Care with Columbia Pacific Communities (CPC).
[Layoffs and top-level exits]
Unlike the past couple of months, there was a sharp fall in layoffs in May. Edtech company PrepLadder and fintech startup Simpl fired 145 and 100 employees, respectively. In April, nearly 1,500 employees were laid off. However, the recent trend of AI implementation is likely to drive mass firings in the upcoming months. As per media reports, Paytm and Ola Electric may join the list with mass firings.
The top-level departures continued in May as a couple of CEOs including Freshworks’ Girish Mathrubootham and Caasha’s Kumar Gaurav left their post in the last month. The list also includes CFO, and CBO, among others.
[ESOP buyback]
April saw two employees’ stock (ESOP) buybacks against three in April and four in March. Home service marketplace Urban Company announced its fifth and highest ESOP buyback of 2024 worth $24.4 million. In March, Meesho announced a stock buyback program worth $24 million.
Visit TheKredible to see series-wise deals along with amount breakup, complete details of fund launches, and more insights.
[Conclusion]
The strong revival in May might be attributed to a few large deals, but even these no doubt signal confidence in the market for many other investors, and serve as a good indicator of future direction in the market. Add to that possible delays from investors waiting for the election circus to be over, and it is safe to say, despite headwinds, the Indian startup ecosystem will look forward to a much better funds flow in the coming months.
