India Deals Barometer Report: Startup fundraising rises 37% in Oct to $1.4b

Fundraising by Indian startups touched $1.37 billion across 87 private equity and venture capital transactions in October, registering a growth of about 37% over September, according to proprietary data compiled by DealStreetAsia.

Deal value increased on the back of big-ticket deals, despite deal volume falling 24.3% from 115 in September.

On a year-on-year basis, the deal value was less than a third of the amount raised in October 2021 when startups had collectively raked in $4.6 billion across 162 transactions, signalling a serious downturn. 

The values of seven deals in the month were undisclosed.

Unlike in September, when there were no $100-million deals, October saw at least four mega deals being sealed by edtech major BYJU’s ($250 million), SaaS platform Icertis ($150 million), solar panel manufacturer Waaree Energies ($121 million), and B2B e-commerce platform Udaan ($120 million).

Top ten deals in October

While India produced one unicorn in September, no startup made it to the coveted club in October. Unicorns are privately-held companies valued at $1 billion and above.

Software stays ahead of the curve

Software was the most funded industry by deal value in October with a total of $303 million raised across 24 deals. Icertis bagged the largest round of $150 million through a revolving credit facility and convertible financing from Silicon Valley Bank.

Other software startups that secured financing in the month include SiMa.ai, Tracxn Technologies, Drivetrain.ai, Assiduus Global, Devtraon, Lumiq, and Impact Analytics, among others.

BYJU’s $250-million deal pushed the education industry to the second spot with a total of $289 million funding across six deals. BYJU’s raised the $250 million through a rights issue from existing investors including Qatar Investment Authority (QIA) at a $22 billion valuation. Last month, the company also raised Rs 300 crore ($36.4 million) in a collateral-free loan from its wholly-owned subsidiary Aakash Educational Services.

At present, BYJU’s is actively taking steps to restructure its operations to attain group-level profitability by March next year. The startup has been lately drawing a lot of criticism for its accounting practices and mass layoffs.

At $190 million, financial services was the third most funded industry with a total of 16 transactions. The fundraisers include Progcap ($50 million), Kinara Capital ($25 million), Snapmint ($21 million), Shardeum ($18.2 million), and Pillow ($18 million).

Together the top three industries — software, education/training and financial services — raised a total of $782.5 million, accounting for over half of the deal value in October.

Early-stage deals steal the limelight

In terms of deal volume, early-stage deals grabbed the limelight yet again. There were a total of 32 pre-seed and seed-stage deals worth $77 million in the month. While the volume is a tad lower than 40 in September, the value is up by almost 30%.

Blockchain startup Shardeum raised the largest seed round of $18.2 million in October with participation from close to 50 investors, including Jane Street, Struck Crypto, The Spartan Group, Big Brain Holdings, DFG, Ghaf Capital Partners, and Foresight Ventures among others.

Startups at pre-Series A and Series A stages scooped up a total of $174.4 million across 26 transactions as against $117 million across 25 transactions in September. GlobalFair, Pillow, Assiduus Global, Drivetrain.ai, PayVEDA, and Revfin were among those that raised Series A rounds in the month.

The value of debt deals, too, rose 87% to $151.8 million in October from $81 million in September.

The share of growth-stage deals, among deals with disclosed funding stages, in overall funding dropped to $242 million across seven transactions, i.e 17% of the deal value in October. The growth-stage deals, Series B or post-Series B rounds, were worth $537 million across 19 transactions in September.

Most active investors

Venture Catalysts, along with its accelerator fund 9Unicorns, emerged as the most active investor for the second consecutive month with a total of five deals including content and marketing technology startup Flickstree, D2C food brand WickedGud, eyewear brand ClearDekho, and AI-powered cross-border, multi-platform e-commerce accelerator Assiduus Global.

Blume Ventures, along with its Blume Founders Fund, was the second most active investor with a total of four transactions in its kitty. These include celebrity engagement startup Tring, insurtech startup BimaKavach, electric vehicles startup Euler Motors, and deep tech EV solutions company Vecmocon.

Venture capital firms Elevation Capital, Accel, and Inflection Point Ventures followed with three investments each.