Investment firms bet on early-stage start-ups
BENGALURU: Amid a decline in late-stage deals, the early-stage funding seems to be thriving, as on Tuesday alone four start-ups closed their seed funding round ranging between $200k and $2 million.
Shaka Harry, a plant-based meat start-up, has received an investment of $2 million in a seed funding round led by Better Bite Ventures, Blue Horizon and venture debt fund - Panthera Peak.
Shri Chyawan Ayurved, a start-up providing herbal products, has raised $200k in the seed round. Veg Route, an agritech start-up, has raised $1.1 million in a seed funding round, led by VGROW Ventures, and B2B SaaS start-up ElevateHQ has raised $1.1 million in a pre-seed funding round led by Leo Capital.
Meanwhile, B Capital, a multi-stage investment firm which has backed BYJU’S and Meesho, among others, on Tuesday announced the close of its $250 million Ascent Fund II. This is B Capital’s first dedicated early-stage fund. Ascent invests in pre-seed through series A rounds globally. “Forty years of investing has taught me that early-stage founders have the best view of where the market is heading,” said Howard Morgan, chairman at B Capital Group.
Last month, Axilor Ventures announced its plan to launch a Rs 770 crore second fund to back early-stage start-ups. This is almost four times the size of the first fund. “At the seed stage, it is important that a start-up receives the right kind of support, coaching and partnership in order to nurture their growth,” said Mohamad Faraz, Founding Partner, Upsparks. A Micro VC firm Upsparks has seed-funded over 60 companies with focus on SaaS, fintech, B2B, Climate/Clean tech and Web 3.0, among others. It aims to complete 100 start-ups in its portfolio by investing an estimated Rs 100 crore by the end of 2022.
Vanshika Mangla, Co-founder and Head of Investments, Pitch Our Way, said that private investments in digitally driven Indian start-ups have topped $36 billion this year, overtaking VC deals for the first time.
Many investors say that sectors such as crypto, business-to-consumer (B2C), healthcare, fintech and SaaS are growing fast, and they will continue to grow rapidly in the coming year as well.
"This year, seed deals dominated with nearly 396 deals amounting to $705.86 million, while series A funding consisted of 166 investments adding up to about $1.67 billion," Mangla added.