[Weekly funding roundup Jan 31-Feb 6] Capital inflow sees marginal uptick

Venture capital funding into Indian startups rose marginally in the first week of February, and it was largely due to two reasonably sized transactions, but fund inflow continues to remain restricted, revealing the challenges for the ecosystem.

The total VC funding for the week stood at $191 million across 20 transactions. In contrast, the previous week saw capital inflow of $152 million from 22 deals. There is a direct correlation between the number of deals and the funding amount. The higher number of deals leads to a larger value of funding.

Over the last two weeks, the number of deals has remained in the 20s range. In the week from January 17 to 23, the funding number touched $373 million, and this came from 40 deals.

Now, the VC funding on a weekly basis has come back once again to the familiar trend of being around in the $100-200 million range. This is not a positive sign for the startup ecosystem.

In the current week, the VC funding was spread across stages, and as expected, the highest deal activity was from the pre-Series A stage, but the quantum of money raised was lower. Also, the funding was across segments of startups cutting across EV, D2C and climatetech.

Overall, the funding momentum continues to remain challenging and added to this, the external environment has not been conducive, given the stock market volatility on the developments surrounding the artificial intelligence segment.

Key transactions

Electrical vehicle platform Drivn secured financing commitments of up to $80 million from Nomura.

D2C startup The Whole Truth raised $51 million from Sofina, Sauce.vc, Peak XV Partners, AYRA Ventures, Z47 and angel investors.

Climatetech startup Varaha raised $20 million from WestBridge Capital, RTP Global and Omnivore.

Fashion quick-commerce startup ZILO raised $15.3 million from Peak XV Partners, InfoEdge Ventures, Chiratae Ventures, Alteria Capital, Stride Ventures, and angel investors.

Home interiors materials platform Material Depot raised $10 million from Accel, Stellaris Venture Partners, Whiteboard Capital, DeVC, Soma Capital, MyAsiaVC and angel investors.