[Weekly funding roundup July 11-18] Startups see another quiet week as VC momentum eases

Venture capital (VC) inflow into Indian startups has remained slow so far in July due to the low number of deals and the absence of large value transactions.

The total funding for the third week of July was at $124 million from 20 transactions. In contrast, the previous week saw a total inflow of $100 million.

July has not been encouraging for the Indian startup ecosystem so far, as VC funding on a weekly basis has hovered around the $100 million range. Lack of large value deals have hindered the funding momentum.

During this week, the difference between the early and growth stages of funding was quite narrow. Surprisingly, there was no venture debt funding raised during this week. These developments do not provide confidence to the Indian startup ecosystem as investors continue to remain cautious given the uncertain macroeconomic environment.

The current situation may likely persist for some more time. With AI dominating the headlines, startups, especially in the US, are raising funding. However, India seems to be missing this trend, sans some sporadic investments into local AI companies.

Given this situation, startups will need to show further resilience in terms of stretching their existing pool of capital and hope that the environment will change for the better soon.

Key transactions

Digital payments firm PayU India raised Rs 302.88 crore ($35 million approx.) from MIH Payments Holdings BV, a financial holding company owned by Prosus.

Deeptech startup QpiAI raised $32 million from Avataar Ventures and the National Quantum Mission of the Department of Science and Technology.

Home decor startup Vaaree raised $4.6M from PeerCapital, Peak XV, All In Capital, Sattva Ventures, and the Asian Paints family office.

Lo! Foods, a protein food startup, raised $3.5 million from Rainmatter Health, Capital Code, Mount Judy Ventures, Ice.VC, KPB Ventures, and family offices.