Blog

May has not exactly started on a positive note in terms of venture capital inflow into Indian startups. A single transaction of PharmEasy contributed to three-fourths of the total funding raised in the first week.

The first week of May saw total funding of $288 million across 19 deals, with the PharmEasy transaction accounting for $216 million. In contrast, the previous week’s total funding of $192 million.

The funding raised by PharmEasy came at a steep discount of 90% in its valuation and this reveals the challenges that startups continue to face in raising capital.

Similarly, MyShubhLife which was acquired by UGRO Capital for a value of Rs 45 crore was at a steep discount from its previous valuation of around Rs 240 crore.

This is likely to be the trend for the Indian startup ecosystem where investors will seek reasonable valuations from the startups and they will not have any other option besides opting for raising money at a lowered value.

However, the silver lining amid these developments is the steady run by venture capital firms raising fresh capital. VC firms raising capital this week included Stride Ventures, ChrysCapital, IvyCap Ventures and Eternal Capital. The expectation is that this capital will come back into the ecosystem at some point or the other.

Key transactions

Online pharmacy startup PharmEasy raised $216 million from Manipal Education and Medical Group (MEMG) and other existing investors.

EV startup Charge Zone raised $19 million from a UK development finance institution and impact investor, British International Investment.

Infinity Fincorp raised an additional $8 million from Archerman Capital in an extension to its recent $26 million funding round led by Jungle Ventures.

Packaged food startup Go DESi raised Rs 41 crore ($5 million) from Aavishkaar Capital, Rukam Capital, Roots Ventures, and DSG Consumer.

Fintech startup BRISKPE has raised $5 million from PayU.