Indian Startup Ecosystem is witnessing a major shift in the pattern of venture capital investment as more investors tend to invest in startup companies in the form of debt. During the past week, Indian startups received more amount of debt capital funding than equity funding.
Market analysts are of the opinion that the latest trend of more affinity toward debt capital investment shows a low level of confidence within the investor community. High inflation in major economies and economic instability triggered by higher consumer price indexes are said to be reasons for increasing concerns among investors. The growing fear of a global economic slowdown is also forcing Venture capital investors to think twice before making major funding commitments.
Statistics suggest that the Indian startup ecosystem witnessed total funding of 114 million dollars in the last week of October 2022. This was out of 10 funding deals across various sectors. When compared to previous weeks, the funding for startups tumbled during the last week. In the previous week, Indian startups had raised a total funding of 419 million dollars. The huge funding in the previous week was supported by the latest funding round of Edtech startup, BYJU’s.
There are also reports that various startup companies which were planning to go public in 2022 had deferred their IPO plans due to high volatility in the global capital markets. Market analysts do not see any improvement in the confidence of investors as the economic condition is going to get worse. Business activities are going to witness a slowdown from an international perspective as everyone from the business world is expecting a recession by the first half of 2023.
Major Funding Deals
boAt Lifestyle – Globally renowned consumer electronics company raised 60 million dollars in a funding round led by Warburg Pincus and Malabar Investment. boAt Lifestyle has also decided to postpone plans for an initial public offering.
Kinara Capital – A fintech startup company founded by Hardika Shah raised 24 million dollars in a funding round led by British International Investment (BII). The funding round also saw the participation of Nuveen and the ASN Microkredietfonds.
Devtron – a Tech company based in Gurugram raised $12 million in a funding round led by Insight Partners, Leo Capital, and angel investors.
BluSapphire Cyber Systems – Cybersecurity Startup based in India raised 9.2 million dollars in a funding round which saw the participation of investors such as Barings India, Dallas Venture Capital, RPG Ventures, and Merisis Venture.