Funding winter seems to have a firm grip on the startup ecosystem as the weekly capital inflow hovers around the $100 million mark.
The first week of October saw total venture funding at $112 million cutting across just 10 deals. In comparison, the previous week saw a fund inflow of $140 million. This has been the trend for the last six weeks where the total venture capital amount is hovering around $100 million.
This is perhaps a sign of the times where the very weakened capital inflow over the last couple of months has become the stark reality for the startup ecosystem in the country. The funding crunch is expected to stay for a few more months.
At the same time, there was another major development during the week which is perhaps a reflection of the current environment. Prosus, the parent company of PayU, has terminated the proposed acquisition of BillDesk and there was no clarity on what exactly was the trigger for this decision.
The termination sends a negative signal to the entire ecosystem. Though reports indicate that the dispute was around valuation as the changing economic environment may have forced PayU to rethink the deal.
Similarly, acquiring Mahindra Logistics of Rivigo’s B2B express business at a discount shows the steep correction on the entire valuation model for the startup ecosystem in the country.
At present, there are very few positives to look forward to in terms of venture capital inflow and one hopes that situation would turn for the better soon.
Electric vehicle (EV) startup Euler Motors raised $60 million from GIC Singapore, Blume Ventures, Athera Venture Partners, QRG Holdings, ADB Ventures, and Moglix.
Neo-bank startup Vance raised $5.8 million from Hummingbird Ventures, Global Founders Capital, YCombinator, Soma Capital and angel investors.