ICYMI: Last Week’s Funding Wave for Indian Startups

Indian startups took home over US$300 million last week

The last week was good to Indian startups in terms of funding, with several new rounds of funding as well as debt investments coming through.

Over US$300 million was poured into the country’s startup community through varied funding avenues including early-stage funding, debt financing, and in the case of one unicorn, a $100+ million deal.

Here’s the week that was for Indian startup funding.

Smaller rounds get the week going

The week kicked off modestly, with WhatsApp-integrated product cataloguing app Bikayi raising $2 million in seed funding, aimed at enabling the startup to reach a million new merchants.

Several notable investors pitched in, from popular startup accelerator Y Combinator, and Grammy Award-winning band The Chainsmokers’ MANTIS Venture Capital, to U.S.-based Pioneer Fund, Teachable Founder and CEO Ankur Nagpal, and French investment firm Leonis Investissement.

This was followed by other early rounds, including online interiors portal Kraftivo’s maiden seed funding and digital logistics platform Trukky’s angel round raised from Mumbai Angels.

While both startups chose not to disclose the funding amount, Trukky noted that it was cash flow positive based on its earnings before interest, taxes, and amortization (EBITA).

Software-as-a-Service (SaaS) platform for content management Quintype Technologies raised the first million-dollar round of the week with its INR250 million (around US$3.4 million) Series A round.

The funds were raised exclusively from Indian asset management firm IIFL Asset Management. The company had earlier raised $3.3 million in 2015 from Indian business tycoon and serial entrepreneur Raghav Bahl.

Moving to bigger numbers

Interestingly, two Indian startups raised matching rounds last week, and on the same day. 2019-founded recruitment platform Apna and artificial emotional intelligence platform Entropik Tech also raised funding in the millions this week, with both startups raising $8 million in their respective Series A rounds on the same day.

Institutional investors Sequoia Capital India, Greenoaks Capital, rocketship.vc, and Lightspeed India Partners pooled their funds for Apna’s Series A, and Entropik’s round was led by Abu Dhabi state-owned venture fund Alpha Wave Incubation, with participation from Indian investors Bharat Innovation Fund and IDFC-Parampara Fund.

Fractional real estate investment platform Strata and home delivery app Dunzo also raked in a few million last week. While SAIF Partners-backed Strata raised INR 1.4 billion (around $19 billion at current rates) in an unknown venture round, Dunzo pocketed $28 million from the first tranche of its Series E round led by LGT Lightstone and Google. According to estimates, the funding takes the company’s valuation to $245 million.

Vernacular gaming platform WinZO was the latest Indian startup to have raised a round last week, with its $18 million Series B announced on Thursday.

The round was led by early stage investors Singapore-based Makers Fund and U.S.-based Courtside Ventures, both of which debuted their investments in India. WinZO Co-founders Paavan Nanda and Saumya Singh Rathore also pitched in.

Unicorns lead the way

The biggest funding rounds last week came from two of India’s largest from food delivery and edtech unicorn companies.

Indian edtech startup Unacademy raised a whopping $150 million in a round led by SoftBank’s Vision Fund 2. This puts its valuation at $1.45 billion, making it India’s second edtech unicorn after Byju’s. General Atlantic, Sequoia Capital, Nexus Venture Partners, Facebook, and Blume Ventures also participated in the round.

The funding is the latest in a slew of developments at Unacademy. The company had just raised $110 million in a Series E round earlier this year and has been aggressively expanding with a spree of acquisitions this year. Of the four acquisitions by company, three were made in this year alone.

Apart from making headlines for its period leave policy, food aggregator unicorn Zomato also raised $62 million in a Series J round of funding from Temasek-backed MacRitchie Investments

The round was originally expected to close at the start of the year with funding from Ant Financial, but fell through after the Indian government imposed sanctions on Chinese investors.

Raising funds from debt

The week also brought some debt funding into the mix. Music streaming app Gaana raised $50 million in debt from Tencent, as well as from majority shareholder Times Now. Owing to the India sanctions, Tencent routed the funding to Gaana through subsidiary Tencent Cloud Europe BV.

Another music-based tech startup boAt, which manufactures consumer audio electronics also raised debt to the tune of INR250 million (around $3.4 million) for product expansion from Temasek- and UOB Group-backed InnoVen Capital.

Koye Pharmaceuticals also raised a similar amount in debt. The pharma company raised INR300 million (around $4.1 million) from Indian boutique advisory firm BlackSoil.

While investor interest in India remains sturdy, reports suggest that startup funding nosedived this year, with a year-on-year drop of 84% in August 2020.

In this background, these funding rounds came as a sign of good news for the startup ecosystem in India, as Indian startups get back up on their feet in the wake of the global pandemic this year.

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