In February, the funding landscape showed signs of improvement, fueled by substantial growth-stage investments and noteworthy traction for some early-stage startups. However, the Indian startup ecosystem continued to grapple with persistent challenges, including layoffs and key executive departures.
In terms of funding, Indian startups secured an impressive total of nearly $900 million across 121 deals during February, as reported by TheKredible. This comprised $585 million from 25 growth-stage deals and $313.5 million from 83 early-stage deals, with 13 undisclosed rounds.
Comparing month-on-month and year-on-year trends, February witnessed a modest funding increase from $732.7 million in January. Notably, the funding surpassed the February 2023 mark of $845 million, marking a positive year-over-year trend. The month saw substantial funding events, including a $100 million Series E round for Shadowfax and a $95 million secondary round for Capillary Technologies.
Top early-stage deals included Avail (blockchain), AstroTalk (spiritual tech), and Metalbook (metal supply chain), securing $27 million, $20 million, and $15 million, respectively. The early-stage landscape saw the top eight startups each raising at least $10 million in their funding rounds, with Keus, OTO, Moove, Vidyut, and Interview Kickstart among them.
Breaking down the funding by stage, Seed and Series A deals led with 33 transactions each, followed by 12 Pre-Seed deals and 10 Pre-Series A deals. Among growth-stage transactions, Series B, Series C, Series D, and Series F deals were notable, alongside ten startups securing debt funding.
In terms of city-wise deals, Bengaluru retained its position with 45 transactions, accounting for approximately 54% of the total funding in February. Delhi-NCR and Mumbai followed with 26 and 25 deals, respectively. E-commerce startups dominated the segment-wise distribution with 27 deals, followed by healthtech, fintech, and SaaS.
Blume Venture and Stride Ventures emerged as the most active investors in February, each making five investments. Fireside Ventures, 9Unicorns, Antler India, IAN, and Omidyar were also prominent investors during the month.
February witnessed 12 mergers and acquisitions, including the acquisition of Kuvera by CRED, LotusPay by Juspay, Difenz by Signzy, Ninja Global FZCO by Nodwin, and CenSea by Captain Fresh.
The month also witnessed ongoing layoffs, affecting over 350 employees across six startups, with Log9 Materials topping the list. Additionally, ten top-level exits were recorded, including notable departures from Flipkart and Paytm Payments Bank.
While challenges persist, signs of improvement are evident, with a heightened focus on resilience among startups. A buoyant stock market and investible funds for promising ideas suggest a positive shift, particularly in emerging segments like Proptech. The AI sector is showing sustained momentum, while climate tech is poised to attract serious investor attention. Global realignments in manufacturing and services also bode well for India in the medium to long term. The upcoming elections may serve as a litmus test for investors, emphasizing the shift towards stable and consistent policies over favorable ones.
