Funding and acquisitions in Indian startup this week [22 - 27 July]

During the week, as many as 22 Indian startups raised around $113.39 million in funding. These deals count 5 growth-stage deals and 8 early-stage deals while 9 early-stage startups kept their transaction details undisclosed.

During the previous week, 35 early and growth-stage startups cumulatively raised more $261.21 million in funding.

[Growth-stage deals]

Among the growth-stage deals, 5 startups raised $49.3 million in funding this week. Renewable energy firm Rays Power spearheaded with its $15.1 million funding. Education loan provider Auxilo, NBFC NeoGrowth, EV company Ather Energy, and wealth and asset management firm Neo followed with $12 million, $11.2 million, $7 million, and $4 million in funding, respectively.

[Early-stage deals]

Further, 8 early-stage startups secured funding worth $64.09 million during the week. Manufacturer of high precision tooling for aero-engines and airframes Unimech Aerospace led the list followed by wealthtech startup Stable Money, co-working solution provider Incuspaze, quick service restaurant chain Charcoal Eats, and D2C luggage brand Nasher Miles.

Provider of smart building solutions Nhance, two-wheeler service provider VOC Automotive, and HR technology platform Umwelt also raised funding.

As many as 9 startups did not disclose the funding amount raised are; Pneucons, Godaam Innovations, VedaFit Foods, Aqin Biotech, Mkelly Biotech, Devnagri, WTF, Empyreal Galaxy, and Mayhem Studios. For more information, visit TheKredible.

[City and segment-wise deals]

In terms of the city-wise number of funding deals, Mumbai-based startups led with 6 deals followed by Delhi-NCR, Bengaluru, Ahmedabad, Bareilly, Hyderabad, Jaipur, Nashik, and Rupnagar.

Segment-wise, Agritech and Fintech startups grabbed the top spot with 4 deals each. E-commerce, Manufacturing, and Proptech tech startups followed this list among others.

[Series-wise deals]

During the week, pre-Seed, Seed, and Series A funding deals led the list with 5 deals each followed by 3 Debt and 1 Angel, pre-Series A, Series B, and Series C deals each.

[Week-on-week funding trend]

On a weekly basis, startup funding slipped 56.6% to $113.39 million as compared to around $261.21 million raised during the previous week. This is the lowest weekly funding in the last 15 weeks.

The average funding in the last eight weeks stands at around $323 million with 27 deals per week.

[Fund launches]

India Accelerator has launched a new vertical to support cleantech startups with substantial funding. Former defense secretary Ajay Kumar's VC fund focused on defense, aerospace, and deeptech has successfully raised over its target corpus.

Meanwhile, the Fashion Entrepreneur Fund has secured investments from prominent figures like Ravi Jaipuria and Akshay Kumar to empower fashion entrepreneurs in India.

[ESOP buyback]

Adda247 is buying back shares from over 130 employees at a price 40 times their initial purchase price. This move comes ahead of the company's planned IPO in 2027.

[Key hirings and departures]

Ecom Express has strengthened its leadership by appointing Jitendar Kumar as Chief Business Officer and Abhinav Imandi as Senior Vice President. Meanwhile, Swiggy Instamart has expanded its team with key hires including Himavant Srikrishna Kurnala as SVP of Product, Mayank Rajvaidya as VP of Fruits & Vegetables, Manu Sasidharan as AVP of FMCG Category, and Kumar Rahul as AVP of Business Development. Drive FITT, Gupshup, and VC firm 360 ONE Asset Management also witnessed changes in their leadership teams.

While, Asia managing partner of Eight Roads Ventures, Raj Dugar has reportedly stepped down after 17 years.

[Mergers and Acquisitions]

Business advisory firm Riveron has expanded its operations by acquiring Yantra. In the healthcare domain, Thyrocare has strengthened its presence in Northern India through the acquisition of Polo Labs. In the insurance and seafood industries, Acko and Captain Fresh have respectively acquired OneCare and Koral to bolster their market positions and service offerings.

[Potential deals]

Electric mobility startup Kazam is set to raise a $5 million funding round while Wingreens Farms seeking $4.3 million in debt financing. In the tech space, Glance is in advanced talks to raise $250 million, while Leap Finance is eyeing a $70-100 million round to achieve unicorn status. Additionally, Nykaa is securing Rs 125 crore through non-convertible debentures, as per media reports.

Emami is set to acquire 100% stake in The Man Company, marking its entry into the D2C space.

Visit TheKredible to see series-wise deals along with amount breakup, complete details of fund launches, and more insights.

[New launches and partnerships]

▪️ Google partners with ElectricPe to bring EV charging stations to Google Maps in India

▪️ CRED launches financial management platform CRED Money

[Financial results this week]

▪️ Go Digit’s revenue falls in Q1 FY25 but profit spikes 90%

▪️ Waycool posts Rs 1,251 Cr revenue and Rs 686 Cr loss in FY23

▪️ Urban company claims Rs 827 Cr revenue in FY24; 70% cut in losses

[Key highlights of the Union Budget impacting startups]

Angel tax: The government abolished the Angel Tax for all investors, effective April 1, 2024. This should make it easier for startups to raise funding.

Focus on MSMEs: The budget allocated Rs 2 lakh crore to support MSMEs (Micro, Small and Medium Enterprises) with a focus on employment, skilling, and other opportunities.

Easier foreign investment: The government plans to simplify rules and regulations for Foreign Direct Investment (FDI) to make it easier for overseas investors to invest in Indian businesses.

Changes to tax rules: Non-reporting of movable assets up to Rs 2 lakh will no longer be penalized. While, income from share buybacks by companies will be taxed as dividends for the investor, starting October 1, 2024.

[News flash this week]

▪️ QIA seeks court injunction to halt sale or transfer of Byju Raveendran’s assets

▪️ UPI in June: PhonePe, Google Pay see marginal decline, Paytm records flat growth

▪️ Paytm fined for ESOP stamp duty lapses, gets NOD to invest in payments arm

▪️ Ola Electric to launch IPO on August 2

▪️ The RBI fined Ola Financial Services for flouting KYC & PPI norms

▪️ Delivery startup Dunzo faces new insolvency threat

▪️ Manipal Group gets green light to increase stake in Aakash

▪️ Cashfree Payments first to secure RBI's cross-border payment license

▪️ Google Maps to offer metro ticket booking in Kochi and Chennai

▪️ Insurtech startup Covrzy gets broking license from IRDAI

[Conclusion]

The Indian startup ecosystem experienced a significant slowdown this week with funding plummeting by 56.6% compared to the previous week. While there were notable fund launches and new verticals emerging, the overall funding landscape was subdued.

The Indian business landscape has seen a flurry of activity in recent weeks. Fintech giant Paytm has been fined for non-payment of stamp duties related to ESOPs, while simultaneously securing approval to invest in its payments arm. In the education sector, Manipal Health Systems is set to increase its stake in Aakash Educational Services.

Bengaluru-based fintech startup Cashfree Payments has become the first company to obtain a Payment Aggregator Cross Border (PA-CB) license from the Reserve Bank of India (RBI). This license allows the company to process online transactions for both imports and exports, boosting cross-border trade and payments in India.

Additionally, Google Maps is introducing a new feature that allows users in Kochi and Chennai to book metro tickets directly through the app. This service will be powered by the Namma Yatri app, which handles the payment and booking process.

Cash-strapped delivery startup Dunzo is facing another legal challenge. A creditor has filed for insolvency proceedings against the company, claiming that Dunzo has only paid half of its owed dues. This is the latest financial setback for the Reliance-backed startup.