(Weekly funding roundup Oct 27-Nov 1) Sharp increase in venture capital inflow

Venture capital (VC) funding for Indian startups witnessed an uneven inflow on a weekly basis in October, and the last week of the month saw an increase largely due to the single large deal of Finova Capital.

The VC inflow for the last week of October and the start of November stood at $289 million, cutting across nine deals. In contrast, the previous week saw a total funding of $178 million.

This uneven nature of VC inflow reveals the continuing challenges that the Indian startup ecosystem continues to face in terms of raising fresh capital. This week, there were a few sizeable venture debt transactions, revealing the difficulty of raising capital through the equity route.

The ongoing festive season was also a contributing factor for the slowness in the VC inflow. The week saw sluggish activity as only nine transactions were reported.

As the year comes to a close soon, total funding in the Indian startup ecosystem in 2024 will most probably exceed the total funding of $10.8 billion raised in 2023. However, it is unlikely to be any substantial increase.

The forthcoming week will be watched with keen interest as the IPO of consumer internet company Swiggy opens for bidding on November 6.

Many startups reported their FY24 numbers, including Meesho, Ninjacart and Cuemath. The common pattern was that they increased their revenue while reducing losses.

Key transactions

Finova Capital raised $135 million from Avataar Venture Partners, Sofina, Madison India Capital, and Norwest Venture Partners.

Vridhi Home Finance raised Rs 310 crore (about $37 million) from Norwest Venture Partners, Elevation Capital, and the company's founders.

Online B2B platform Udaan raised Rs 300 crore (about $36 million) from Lighthouse Canton, Stride Ventures, InnoVen Capital, and Trifecta Capital.

Zinc, an edu-wealth startup raised $25.5 million from Nexus Venture Partners, Quona Capital, EDBI, Global Ventures, and Saison Capital.

D2C startup Country Delight raised Rs 200 crore (about $24 million) from Alteria Capital.

Grain commerce platform Arya.ag raised $19.8 million from the US International Development Finance Corporation.

ARYA, a wholly-owned subsidiary of GPS Renewables, a full-stack biofuels firm, raised Rs 100 crore ($12 million) from InCred Opportunities Fund and Spark Capital.