Indian Startup ecosystem witnessed a decline in venture capital funding during the last week as investment agencies and angel investors are slowing down pumping cash into new-age startups. This trend is normal during the final weeks of a calendar year. For the past few weeks, Indian startup ecosystem witnessed a steady flow of capital inflow which was against the estimates of startup analyst.
Statistics suggests that during the second week of December, Indian startup ecosystem witnessed total startup funding of 101 million dollar from 18 venture funding deals. This is a steady decline in funding when compared to previous week when total financing stood at 149 million dollars.
With nearly three weeks remaining for year ending, venture capital and angel funding to startups in India are expected to remain slow. The latest trends do not show any prospects of sudden change in the funding climate.
Major Funding Deals
Renee Cosmetics – Ahmedabad based D2C beauty brand Renee Cosmetics raised 25 million dollars in a Series B funding round led by Evolvence India. The funding round also witnessed participation of Edelweiss Group. Equanimity and 9Unicorns. Equanimity and 9Unicorns are existing investors in the company.
With more than Rs 100 crore ARR (Annual Recurring Revenue), Renee Cosmetics is currently valued at 100 million dollars.
Park+ – Tech startup based in Gurgaon Haryana raised over 16 million dollars in a Series C funding round led by Eqip Capital II. The funding round also saw participation of Matrix Partners and Sequoia Capital India.
Funding Environment Analysis
According to Tracxn, a private data company based in Bengaluru, startups in India have raised a total of 24.7 billion dollars till now. Compared to the previous financial year period, there has been a 35 percent decrease in total funding. During the same period from previous year, total funding stood at nearly 37.2 billion dollars.
Data shows that there has been a serious shrinkage in late stage investments and seed stage funding for startups. When compared to previous year, both late stage investments and seed stage funding has gone down by 45 percent and 38 percent respectively.
Decline of funding in late stage and seed stages of startups suggests that investors are highly conscious regarding participating at a nascent stage of a startup. They are also unwilling to pump large amounts of money to startups at advanced stages of development. This cautious trend among investors can be related to current macroeconomic conditions in the global market.
As capital markets across the globe are waiting to see next moves of central banks regarding interest rate hikes, investors will continue to sit at bay when it comes top startup funding.
