BENGALURU: Despite funding winter, early-stage start-ups have been witnessing an uptick in fundraising, as in February alone, they managed to raise $274.2 million in 34 funding rounds compared to $242.6 million raised in the same month last year.
According to data sourced from Tracxn, early-stage start-ups raised $260.4 million in January in 26 rounds. However, this is less compared to $379.8 million it raised in the same month last year.
On Thursday, SaaS start-up Nurturev raised $1 million in pre-seed funding led by Antler India. On February 27, Reo.Dev, a marketing stack for developer focused companies, raised $1.2 million in pre-seed funding, with India Quotient leading the investment round.
Anand Lunia, General Partner at India Quotient, said that developers are driving the next trillion dollar infra and AI wave. Last week, AutoVRse, an AR/VR tech start-up, secured $2 million in its funding round led by Lumikai. Somdutta Singh, Serial Entrepreneur, Founder and CEO, Assiduus Global Inc and LP Angel Investor, said, there is a growing trend of early-stage startups actively seeking funding, and this is exciting, as it reflects both the increased confidence of founders and the growing appetite of investors to support ventures at an earlier stage.
Investors are approaching these investments with a cautious optimism, recognising the higher risk profile of early-stage ventures. “When we invest, we typically look for strong founding teams with a clear vision, a demonstrably differentiated product or service, and a solid plan for market validation and future growth,” Somdutta added.
Anirudh A Damani, Managing Partner, Artha Venture Fund, said the Indian start-up ecosystem is experiencing a dynamic shift, particularly in early-stage startups. “This resurgence is bolstered by a vibrant SME IPO market and a growing interest from investors seeking upstream opportunities for better deals.”
He added that key sectors like RegTech, FinTech, and SpaceTech, along with emerging LLM platforms, are drawing particular attention. The next 6 to 9 months are poised to be highly favourable for investors, driven by a collective shift towards start-ups with sustainable business models fuelled by customer cash flow, indicating a healthy, upward trajectory for the ecosystem.
Also, sectors such as clean energy and sustainable agriculture that are addressing pressing global challenges are gaining traction.
"With the right approach, early-stage ventures have the potential to attract significant investment and contribute to a more innovative landscape," said Somdutta Singh.
Angel investment platform Inflection Point Ventures recently announced 14 exits from 2023 giving a IRR(internal rate of return) of 61% to its investors.