Indian startup funding slowed down in the latest week (May 25-May 30) with a total funding round of about $75.35 million for 15 startups in growth-stage / early-stage investments. The amount of funding secured in the last week was more than 41% lower than in the week before, when 14 startups raised a total of $128.36 million.

Key Highlights

• Indian startups raised $75.35 million in the latest week, marking a sharp 41% funding decline overall.
• Series A funding remained strongest in the week, accounting for the highest number of startup deals.

Growth-Stage Startups raise over  $32 Million

Investors are still interested in scalable companies in the biotechnology, food, and retail sectors, as these growth-stage companies raised a total of $32.09 million through three deals.

Prime Venture Partners, along with Leo Capital, led a $13 million fundraise for synthetic biology start StrainX Bioworks, which emerged as the biggest growth-stage fundraising this week. The company's business is the innovation of synthetic biology solutions.

It was followed closely by the direct-to-consumer food brand Anveshan, which has raised ₹121 crore ($12.7 million) in its Series B round led by Vertex Ventures. International Finance Corporation (IFC), Titan Capital and some existing investors took part in the funding round as well. The fresh capital is anticipated to be used to finance expansion initiatives and build up the business's merchandise offering.

Meanwhile, the investor demand for quick-service and coffee shops in India’s fast-growing market has continued to give a fillip to the “grab and go” coffee chain, abcoffee, which raised Rs 61 crore ($6.39 million) in a pre-Series B round led by Kliff Ventures.

Early-Stage Funding Touches $43.26 Million

10 deals during the week saw the combined total of early-stage startups raise $43.26 million.

B2B fast commerce system Fairdeal.Market led the segment on raising $15 million in a Series A investment round led by Bertelsmann India Investments. To reinforce its technology capabilities and to speed up the business expansion in the major markets.

Human Archive, the AI training data provider, raised $8.2 million through a round of investors that includes Wing Venture Capital, NVP Capital, Y Combinator, and other strategic backers.

Manufacturing company Tiea Connectors raised Rs 77 crore ($8 million) in a Series A round led by IvyCap Ventures, and home services company Yes Madam received their first institutional funding rounds of Rs 50 crore ($5.2 million) from Info Edge.

D2C footwear company Yoho, semiconductors startup C2i Semiconductors, usage-based billing startup Flexprice and a few emerging technology firms in various industries also managed to successfully raise capital this week.

Also Read: Indian Startup Funding Plunges 56% to $128 Mn Amid Investment Slowdown

Delhi-NCR and Bengaluru Dominate Funding Activity

Delhi-NCR and Bengaluru were the top startup hubs this week with five deals each. Mumbai was followed by 2 transactions, each at the startups in Bhopal, Nagpur and Rishikesh had one.

The geographically distributed VC funding highlights the continued focus of VC activity in the key start-up ecosystems of India, and also strengthens the entrepreneurial momentum in emerging cities.

E-commerce Leads Sector-Wise Investments

Interestingly, from the sector point of view, e-commerce startups saw the most deals, with three deals being made during the week.

There was strong investor appetite across the broad spectrum of innovation driven industries, with other active sectors seen as home services, healthtech, artificial intelligence, manufacturing, food and beverage, fintech, deeptech and enterprise technology.

Series A Funding Remains Investor Favorite

The week's biggest focus of startup activity was series A funding, accounting for five transactions. Three investments were made in seed-stage funding rounds, with additional Series B, pre-seed, pre-Series B, angel, and strategic funding rounds adding to the overall picture of the funding landscape.

The robust Series A activity indicates that investors continue to be interested in startups that have early product-market fit and are in a growth phase.

Weekly Funding Falls 41% Despite Strong Eight-Week Average

Indian startup funding has dropped sharply by over 41% from about $128.36 million last week to $75.35 million this week.

The overall funding situation is quite stable, even though the figures are down. Investor activity in the ecosystem is still strong, with Indian startups accessing an average of $201.6 million per week over the past eight weeks, with approximately 20 deals raised.

Key Industry Developments

• The Supreme Court has upheld the Government's decision to impose 28% GST on online gaming companies, which also paves the way for tax liabilities of over Rs 1 lakh crore.
• While PhonePe continues to dominate the Indian digital payments space with over 10.33 billion UPI transactions in April, it is also seeing robust growth in transactions on its wallet. platform.
• Pushp, backed by A91 Partners, the spice maker, has filed its Draft Red Herring Prospectus (DRHP) for an all-public IPO.
• The RBI granted an in-principle approval to MobiKwik for Payment Aggregator-Physical (PA-P) license, which would add a new dimension to their offline merchant payment services.
• The company has resolved a death claim case worth Rs 4.5 crore in Maharashtra within five days, with the industry increasingly shifting towards the speedy insurance claim settlement.