The 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 capital funding at $112 million spread across just 10 deals. By comparison, the previous week saw an inflow of $140 million. This is the trend for the last six weeks, where the total amount of venture capital hovers around $100 million.
This is perhaps a sign of the times when the much weakened inflow of capital over the past two months has become the stark reality of the startup ecosystem in the country. The funding shortage is expected to last a few more months.
At the same time, there was another major development during the week that perhaps reflects the current environment. Prosus, the parent company of PayU, ended the proposed acquisition of BillDesk and there was no clarity on what exactly was the trigger for this decision.
Termination sends a negative signal to the entire ecosystem. Although reports say the dispute was over valuation as the changing economic environment may have forced PayU to rethink the deal.
Similarly, Mahindra Logistics’ acquisition of Rivigo’s B2B express business at a discount shows the strong correction of the entire valuation model of the startup ecosystem in the country.
At present, there are very few bright spots to look forward to in terms of venture capital inflows and it is hoped that the situation will improve soon.
Electric vehicle (EV) starting Euler Engines raised $60m from GIC Singapore, Blume VenturesAthera 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.