[Weekly funding roundup Feb 28-March 6] VC fund raise falls below $100M level

March has begun on a not-so-positive note for the Indian startup ecosystem as venture capital (VC) funding fell below the $100 million level and also there was a steep drop in the number of transactions during the week.

The total funding for the first week of March came in at $90 million from nine deals. In contrast, the comparable previous week saw total funding of $184 million from 32 deals. This is the second lowest amount raised by Indian startups on a weekly basis and the previous low was $77 million in the first week of January.

This is certainly not a positive sign for Indian startups as it reveals that investors continue to remain on the sidelines. During this week, there were just three deals in the pre-Series A funding round and the amount raised was around $1 million.

These developments are largely due to the uncertain macroeconomic environment as the ongoing tensions in the Middle East has cast an overhang on inflow of VC money. In addition, the advent of artificial intelligence (AI) has also led to certain cautiousness among investors on what kind of startups they would like to fund.

As things stand today, the outlook remains pessimistic for the Indian startups and any revival in the fund inflow is expected only in the second half of the year.

Key transactions

Rural focused commerce startup Rozana raised Rs 290 crore ($32 million approx.) from Bertelsmann India Investments (BII), Fireside Ventures, Spark Growth Ventures, Bikaji Family Office, FE Securities, and family offices.

Home-services platform Pronto raised $25 million from Epiq Capital, Glade Brook Capital, General Catalyst, and Bain Capital Ventures also participated in the round.

Inamo, a tech startup raised $8 million from Prime Venture Partners, Shastra VC, Antler India, and Gemba Capital.

Skincare startup RAS Luxury Skincare raised $7.5 million from Dabur Ventures, Unilever Ventures, Amazon Smbhav Venture Fund and Sixth Sense Ventures.

Electric mobility startup Bounce raised $5 million from existing investors.