The startup funding in India has shown a significant improvement in the latest week with 17 startups raising a total of about $165.3 million, both in growth stage and early stage funding. Investors also showed their continued interest in areas like quick commerce, artificial intelligence, clean energy, food brands, and financial services, as the funding momentum more than doubled compared to the previous week.

As per the industry estimates, the funding of startups jumped by 2.2 times compared to the week before, when 15 startups received $75.35 million.

Key Highlights

• Indian startups pulled in a round $165.3 Million in the past week, up by over double compared to last week.
• Growth-stage investments came in from FirstClub and Innefu Labs, bringing in total investment of more than $85 million.

FirstClub, Innefu Labs Lead Growth-Stage Funding

The majority of the funds raised were by growth-stage companies that raised nearly $134.2 million in total across five transactions.

Quick-commerce startup FirstClub raised the most money over the week with its 55-million-dollar Series B round led by Peak XV Partners and Sofina. Innefu Labs, an AI-powered national security technology company, was next in line, receiving a $30 million Series B investment led by Panthera Growth Partners.

Other significant growth stage deals were electric vehicle maker Simple Energy's Rs 250 crore ($26 million) raised in a public offering, as well as the clean-label food brand Anveshan's Rs 150 crore ($16 million) in a Series B round that was led by both Vertex Ventures and IFC, and the fintech platform WeRize's $7 million in a pre-Series C round by Sonic Innovation Fund.

Early-Stage Startups Attract $30 Million

Early-stage companies secured around $30.1 million in 13 deals in the week.

Video generation startup TrueFan AI led the round with an $10 million Series A investment from Baring Private Equity Partners India and Z3 Partners. Seafood export platform Aquapulse was the next to come in the list as it received a Rs 45 crore investment by NABVENTURES.

Protein snack brand, Phab raised $4 million in pre-Series A round, and edtech startup, ProLearn raised Rs 30 crore in a pre-seed round led by BEENEXT.

A few other start-ups, such as Fraganote, Propsoch and Zuvees, also gained new investor interest for the week.

Also Read: Indian Startup Funding Drops 41% to $75.35 Million in the Latest Week

Bengaluru Tops Startup Funding Activity

Bengaluru continued to be the startup hub in the country this week with nine deals. Delhi-NCR was next with five deals followed by one each from Mumbai and Kolkata, and Bhubaneswar.

Looking at the sectoral, e-commerce companies have emerged with the highest number of deals, with six of them getting funded. Electric vehicle startups, edtech and proptech ventures also closed two deals each, and healthtech and foodtech startups picked up investments as well.

When comparing the number of transactions by funding stage, Series A and Series B rounds outperformed, as it shows that investors are increasingly willing to invest in startups with a successful business model as they scale up.

M&A Activity and ESOP Liquidity Gain Momentum

There was also significant deal activity during the week. Ixigo parent Le Travenues Technology has approved the acquisition of a majority stake in hotel-booking platform Brevistay Hospitality, and Wealth management platform Scripbox has acquired the distribution business of Bluechip Capital's mutual fund business.

In the meantime, employee wealth creation took off. Health benefits platform Plum has unveiled an ESOP buyback scheme of Rs 15 crore, whereas tractor marketplace Traction Junction has rolled out a liquidity programme for employees of the company worth Rs 3 crore.

Renewed Investor Confidence

The increase in startups funding as compared to the previous week indicates that investor sentiment towards the innovation ecosystem in India is on the positive side. Investors are still drawn to scalable, long-term businesses, such as AI, quick commerce, fintech, clean energy, and consumer brands, that are still seeing growth.

The Indian startup ecosystem seems to be continuing to do well despite the global economic uncertainty, with the average funding amount now being around $148 million in the last two months.