Indian startups raised a total of $ 3.36 billion in funding in the first quarter of 2023, recording a drop of about 12% over the previous quarter, amid looming recession fears and a challenging fundraising environment, according to our latest report published this week.
Deal volume was down 23% at 245 as investors continued to tread cautiously, per DealStreetAsia DATA VANTAGE‘s India Deal Review: Q1 2023.
Mega-deals — PE-VC transactions worth at least $100 million — led by the likes of PhonePe, Lenskart, InsuranceDekho, Bicara Therapeutics, and Mintifi accounted for 51% of the total deal value during Jan-Mar 2023.
Check out the detailed India Q1 scorecard, which captures the top deals of Q1 2023, top sectors by fundraising, mega-deals, most active investors, and more.
Moving on to other headlines from this week.
From the LP-GP quarters
Somerset Indus Capital Partners, a healthcare-focused Indian private equity firm, has got soft capital commitments of about $70 million from existing LPs as it hits the road to raise its third fund. The firm is targeting a corpus of $200 million for the vehicle that will buy minority stakes in mid-sized products and services companies in the healthcare sector, a top executive said.
Lenskart and PolicyBazaar-backer Indian VC Chiratae Ventures has hit the final close of its ‘Growth Fund I’ at $122 million to fund companies at Series C or later stages.
India’s Multiples Alternate Asset Management, led by former ICICI Venture veteran Renuka Ramnath, has made the first close of its fourth fund at $640 million as it looks to ramp up investments in domestic companies. The homegrown PE major is understood to be eyeing a total corpus of about $1 billion.
Moving to SE Asia, Vietnam-based Mekong Capital is seeking to raise at least $150 million for its debut impact investment fund that will target companies helping to combat climate change. The fund will have a hard cap of $200 million, PEI reported.
Indonesia-listed e-commerce company Bukalapak has signed a “Subscription Agreement for a Limited Partnership Interest” in 500 Southeast Asia II, L.P. to invest in pre-seed, seed, and early-stage tech companies operating directly and indirectly in SE Asia.
Singapore venture capital investor Integra Partners reached the final close of its second fund at a corpus of $90 million.
In updates from funds focused on the Asia region, LeapFrog Investments, backed by Singapore’s Temasek, has so far raised $110 million from US investors for its latest growth-stage fund that will invest in Africa, South Asia, and Southeast Asia. The fund reportedly has a target of $1 billion.
LeapFrog Investments is also raising $600-700 million for its new fund focusing on climate companies. LeapFrog has appointed Nakul Zaveri to co-head its Climate Investment Strategy.
Japanese trading house Mitsubishi Corp, together with MUFG Bank and others, will launch one of the largest decarbonization funds in Japan, Nikkei Asia reported.
We also tracked US SEC filings to report on fundraising milestones by several global funds active in the region.
KKR has so far raised $2.52 billion for its third technology growth fund. Some Asia Pacific names in KKR’s tech portfolio are TikTok parent ByteDance, India’s Jio Platforms and Voyager Innovations in the Philippines.
Global Infrastructure Partners has so far raised an aggregate of $2.61 billion for its debut emerging-markets infrastructure fund and a feeder fund. GIP Emerging Markets Fund I, which has a target of $5 billion, counts the AIIB and PH pension fund GSIS as its backers.
Accel-KKR, a Silicon Valley-based tech-focused investor, has so far raised about $200 million for its second credit fund.
US-based QED Investors has filed to raise $850 million for new funds. The firm made its first investment in SE Asia last year.
Interviews and analysis
In The LP View this week, we featured government-backed FoF and venture investor Dubai Future Fund CEO Sharif El-Badawi who called for robust governance standards in the Middle East. Funds in the region are enjoying a sweet revival in oil prices, along with some newfound fame among the world’s top GPs. VCs across the world – be it from Silicon Valley to China, or India and Southeast Asia – are flocking to the Gulf in droves.
We had this Caixin report on how Saudi Arabia is quickly rising on a list of hot investment destinations for Chinese companies. Cloud services units of Alibaba, Tencent, and Huawei as well as AI developer SenseTime and logistics firm S.F. Holding are among the firms bullish on the region.
Moving to India, we spoke to Tiger Global-backed Indian edtech firm Vedantu co-founder Vamsi Krishna who expects the firm to touch group-level profitability in the current financial year. Like many edtech firms, Vedantu too fired around 385 employees across departments in Dec after sacking 700 earlier in 2022. The cost cuts have helped the firm reduce annual burn to less than $1 million, he said.
We also had a data-led story from India on another investor favourite sector – health tech, which saw a whopping 81% drop in fundraising in Q1 this year. However, fund managers are seen clinching deals in the traditional healthcare space, including hospitals.
Startup updates
In sobering news this week, Temasek-backed Indian drug and medical services platform PharmEasy laid off employees as it struggles to raise funds amid a slowdown. The number of affected employees could be around 40% of the workforce. PharmEasy has raised a total of over $1.12 billion across 16 funding rounds.
SoftBank-backed Indian social commerce platform Meesho has also laid off 15% of its workforce amid growing pressure to tighten costs. In an internal mail, the company CEO admitted to making “judgement errors in over-hiring ahead of the curve.”
Cars24, a used-vehicle marketplace headquartered in India, has reportedly shut down operations in Saudi Arabia and also in Indonesia. The startup is turning its focus on core markets such as India and Australia. Cars24, a SoftBank- and Tencent-backed unicorn, launched its ASEAN expansion with Thailand in November 2021 and forayed into Indonesia in 2022.
Indonesian ghost kitchen startup DishServe has shut down its business and operations, according to a LinkedIn post by the startup’s CEO Rishabh Shinghi. The current funding winter has impacted the company, he wrote.
Deal news
We scoured filings, through DealStreetAsia’s DATA VANTAGE, to bring you a host of fundraising updates from SE Asian startups.
Singapore-based cybersecurity startup SquareX has secured $6 million in seed funding. The startup, founded by the well-known security researcher and trainer Vivek Ramachandran, bagged the capital from two funds named SEA Seed Investment I and SC SEA Investments I, understood to be vehicles affiliated with Sequoia Southeast Asia.
Healthtech firm Buymed has raised $51.5 million so far in its Series B funding. Buymed operates a B2B marketplace for pharmaceuticals in Vietnam.
LionsBot International, a Singapore-based cleaning robots manufacturer, has raised about $21 million in its Series A funding round after receiving additional investment from city-state tech investor EDBI.
Singapore-based e-commerce solutions provider The Commerce Co has raised $10 million in a Series A funding round. Openspace Ventures invested $6.5 million in the round, while Singapore-based Jungle Ventures chipped in with $3.5 million.
Singapore-based company Ora Group, which operates online specialty care platforms, has secured $8 million in fresh equity funding from investors, including Antler, TNB Aura and Kairous Capital.
Singapore-based startup ecoSPIRITS, the developer of a low-carbon, low-waste distribution technology for premium spirits and wine, has raised about $8 million in fresh funding. The financing, which marks the startup’s Series A round, was led by New York-based investment firm Closed Loop Partners.
BRIK, an Indonesian B2B construction materials aggregator, has raised about $11.35 million so far in its pre-Series A funding round, confirming an exclusive DealStreetAsia report in December.
That is all from us this week. The team at DealStreetAsia has also been working on the eighth edition of the Asia PE-VC Summit. Do take a look at our 40+ confirmed speakers and stay tuned for more updates.
