Funding round-up: a chill in startup funding

Emmanuel Amberber

Radhika P Nair

Funding round-up: a chill in startup funding

Monday November 16, 2015,

3 min Read

funding roundup slug

Conversations across startup ecosystems, from Bengaluru to Silicon Valley, are increasingly about the coming winter in startup funding. The chill seems to be here already, with a drastic fall in deal value week-on-week.

The number of deals in the second week of November stood at 16, with the value at $10.6 million. We are also revising our numbers for the first week of November with the addition of the fund raise done by food startup Yuvi Hospitality. The $15-million investment takes the total number of deals for the week of November 2 to 8 to 19 and overall value to $54.5 million.

But every single deal in the second week of November fell under the angel, seed or Series-A categories. This shows that early-stage investors are still quite optimistic—a sentiment that later-stage investors do not seem to share. This does not seem to be just year-end funding blues. Last year, Zomato had raised $60 million in November.

2nd Week Nov-2-2

An appetite for food and foodtech

It is interesting to see that two food and foodtech companies have raised early-stage investment at a time when the news cycle has been dominated by the shut down of some foodtech startups and firings at many others. Chef’s Basket raised the biggest amount, at $6 million, in the week under review. It raised Series-A funding from venture capital firm SAIF Partners and existing angel investor Haresh Chawla, a Partner at India Value Fund Advisors. The three-year-old company offers ready-to-cook, multi-cuisine dishes that are retailed through hypermarkets and e-commerce sites.

Delight Foods, an e-commerce platform that curates mostly regional and unique food brands from across the country, was the other food company that raised funding.

Considering the fact that the week saw only early-stage deals, it is not surprising that only three companies crossed the $1-million funding mark. Apart from Chef’s Basket, skill training startup iStar Skill and beauty and wellness marketplace BigStylist raised funds.

Top Deals (above $1 million; Nov 9 - Nov 15)

Name of CompanySectorAmount of InvestmentInvestor
Chef’s BasketFood$6 millionSAIF partners and Haresh Chawla
iStar SkillSkill Training$1.5 millionMichael & Susan Dell Foundation, Unitus Seed Fund
BigStylistBeauty and Wellness Marketplace$1 millionInfoEdge

M&As bring cheer

It is not all doom and gloom, however: four startups were acquired in the second week of the month. Three acquisitions—Shadowfax-Pickingo, CarTrade-CarWale and Indian Grahak-Dyscover—saw competitors merging. The Shadowfax-Pickingo deal was primarily an acquihire, though according to reports, there was a cash component. This acquisition follows a reported falling through of funding by Zomato into Pickingo. CarTrade’s buyout of CarWale has given an exit to the latter’s investor Axel Springer, which sold off its 91 percent stake in the company. Both platforms will operate independently. Kolkata-based online hyperlocal grocery delivert startup Indian Grahak acquired Jamshedpur-based hyperlocal marketplace Dyscover. JetSynthesys, the digital and technology subsidiary of JetLine Group of Companies, acquired online and offline fashion retailer Rudraksh. Rasika Wakalkar, founder of Rudraksh, will head the fashion vertical of JetSynthesys.

 Mergers and acquisitions (Nov 9 to Nov 15)

Name of acquirerAcquirer’s sectorName of acquireeAcquiree’s sector
CarTradeAutomobile classifiedsCarWaleAutomobile classifieds
ShadowfaxOn-demand deliveryPickingoOn-demand delivery
JetSynthesysDigital content & TechnologyRudrakshOnline fashion site
Indian GrahakHyperlocal Grocery deliveryDyscoverOnline hyperlocal marketplace

There have been rumblings and warnings of an imminent slowdown in funding for quite some time and now we are seeing deals, especially growth-stage ones, dry up. How bad is this funding winter going to be?