Indian Startup Funding Drops 95% In First Half Of May 2021

SUMMARY

Indian startups raised only $116 Mn in the first half of May, compared to $2.5 Mn in April

The biggest round of May 2021 was raised by Rapido, which raised $43 Mn

So far, no startups have entered the unicorn club this month, whereas 8 startups entered the club last month

After a glorious April 2021, Indian startup funding has gone for a toss this month as the country is facing the worst healthcare crisis it has ever seen, with Covid-19 cases rapidly increasing. Indian startups raised only $116 Mn in the first half of May, representing a 95% decline from $2.5 Mn raised in the first half of April 2021. Overall, Indian startups had raised $4.6 Bn.

The total funding in the first half of May dropped 68% compared to INR 366 Mn reported in the first half of March 2021. Indian startups had raised the total funding of $1.6 Bn in the month of March. Notably, there were no mega rounds (rounds above $100 Mn) in the month of April, whereas there were 13 in April and two in March.

The biggest round of May 2021, between 1 to 15, was raised by Rapido. The Bengaluru-based bike taxi startup raised $43.4 Mn in Series C funding round led by existing investor Westbridge Capital, with participation from eight other investors. According to the ministry of corporate affairs filings accessed by Inc42, Rapido has allotted 30 equity shares at a face value of INR 1 each for cash at a premium of INR 16,644.01, and 1,81,467 Series C compulsory convertible preference shares (CCPS) of face value of INR 10 at a premium of INR 16,635.01 per share.

Westbridge Capital had led the round with the investment of $29.3 Mn, whereas Nexus Ventures infused $6.9 Mn and Everblue Bangladesh LLC infused $1.9 Mn. Pawan Munjal Family Trust, Motherson Lease Solutions, Konark Trust, QED Innovation Labs, OLX CEO Amarjit Singh Batra and MMPL Trust also participated in the round.

Other major funding rounds of May 2021 were edtech startup Teachmint’s $16.5 Mn, gaming startups WinZO’s $13 Mn, fintech startup BharatPe’s $6.8 Mn and healthtech startup Wysa’s $4.6 Mn. Overall, 37 startups were funded in the first half of May 2021, compared to 68 deals in the first half of April and 45 deals in the first half of March.

No startups entered the unicorn club this month. However, media reports claim that Acko may be the next unicorn of the Indian startup ecosystem, as the company is considering to raise a $200 Mn round at a valuation of $1 Bn. April, on the other hand, was a great month for Indian startup ecosystem, which witnessed the entry of eight companies into the unicorn club. This included Urban Company, Chargebee, Gupshup, ShareChat, Groww, CRED, PharmEasy and Meesho.