[Weekly funding roundup May 16-20] Venture investments continue to decline

The tightening of capital inflow into Indian startups has started due to weak macroeconomic environment, which is unlikely to see a turnaround anytime soon.
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Venture funding inflow into Indian startups continues to decline.

The third week of May saw total venture funding of $197 million as compared to $344 million in the previous week, a 43 percent decline. Even the number of deals was on the lower side with the third week seeing 21 transactions as compared to 34 in the previous week.

The largest deal during the week was the $100 million raised by Fashinza, a B2B marketplace for apparel manufacturers in a mixture of debt and equity.

Robotic startup GreyOrange raised $110 million in a growth financing round.

These developments have led to an environment of caution from entrepreneurs and investors alike. YCombinator, a famed startup accelerator platform has already sent out a note to its portfolio companies asking them to prepare for the worst.

It is very likely that the present situation is unlikely to see any quick turnaround as central banks across the world have signalled their intention of raising interest rates to curb the inflation rate and this will naturally bring down the amount of liquidity which will be available in the system.

Notable transactions of the week

Fashinza, a B2B marketplace, raised $100 million in a mix of debt and equity from Prosus Ventures, Westbridge Capital, Accel, Elevation Capital, DisruptAD, and angel investors.

Melorra, a jewellery startup, raised $16 million from Axis Growth Avenues AIF-I, SRF Family Office, N+1, and existing investors.

Community commerce brand Bliss Club raised $15 million led by Eight Roads Ventures and Elevation Capital.

Tech startup Smytten raised Rs 100 crore from Fireside Ventures, Roots Ventures, Sharrp Ventures, Waao Partners, Survam Partners, and others.

Honasa Consumer (HCPL), the parent company of Mamaearth, acquired a majority stake in skincare brand Dr. Sheth’s in a deal valued at Rs 28 crore.

Edited by Saheli Sen Gupta