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The Indian startup ecosystem recorded the highest weekly venture capital funding for the year in the third week of May, boosted by the single largest transaction of Meesho.

VC funding raised by Indian startups during the week totalled $536 million, cutting across 25 deals. In contrast, the previous week saw a total fundraise of $219 million.

The VC funding for the week surpassed the previous highest figure during the year at $339 million recorded in the third week of April.

The increase in VC funding is a positive development for the Indian startup ecosystem as for the first time, the weekly funding has crossed $500 million. However, it remains to be seen if this momentum can be sustained.

The ecosystem continues to face challenges in terms of VC fund inflow given that the high-value cheques are still not forthcoming. It is expected that the last quarter of the year may witness bigger inflow as the ecosystem moves out of the grip of funding winter.

On the other hand, there were other positive developments for the Indian startup ecosystem with Go Digit witnessing an oversubscription of close to 10 times its IPO. This is the first IPO from the stables of Indian startups for this year till now.

Key transactions

Ecommerce startup Meesho raised $275 million in a funding round via primary and secondary share sales.

Microfinance company Annapurna Finance raised Rs 600 crore ($71.8 million approx.) from Piramal Alternatives.

EV charging infrastructure startup Relux Electric raised Rs 250 crore ($30 million approx.) from a group of private real estate and infrastructure investors.

Fintech Propelld raised over $25 million in debt from Credit Saison India, AU Small Finance Bank, InCred Financial Services, and Northern Arc Capital.

RED.HEALTH raised $20 million from Jungle Ventures, HealthQuad, HealthX, and Alteria Capital.

Drone startup Dhaksha Unmanned Systems raised Rs 150 crore ($18 million approx.) from Coromandel International.

Robotics startup Niqo Robotics raised $13 million from Bidra Innovation Ventures, Fulcrum Global Capital, and existing investor Omnivore.

Celcius Logistics raised Rs 40 crore ($4.7 million) from IvyCap Ventures, ⁠Mumbai Angels, and Caret Capital.