Startup Funding News in India and Beyond

India has emerged as a hotbed for startup funding, with a whopping $34 billion invested in 2020 alone. This growth is largely attributed to the government's initiatives to boost entrepreneurship and innovation.

The Indian startup ecosystem has witnessed a significant surge in funding from both domestic and international investors. In fact, the country has become the third-largest startup ecosystem in the world, after the US and China.

The Indian government has been actively supporting startups through various funding programs, such as the Startup India initiative, which provides funding, tax benefits, and other incentives to early-stage startups. This has encouraged more entrepreneurs to take the leap and start their own businesses.

According to a report, India saw a 45% increase in funding for startups in 2020 compared to the previous year, with the average deal size reaching $10 million. This trend is expected to continue, with many investors betting big on the Indian startup ecosystem.

A unique perspective: Venture Capitalists for Startups

Projecting your cash flow is a critical aspect of a startup's financial planning. This involves adding up not only fixed costs, but also the estimated costs of goods and best- and worst-case revenues.

William Brigham, director of the New York Small Business Development Center in Albany, advises new business owners to project their cash flow for at least the first three months of the business's life. You should also consider the interest you owe on borrowed money.

Calculating these costs puts a floor on the revenues needed to keep the business viable and provides a good picture of the cash necessary to start it up. Without being realistic about your cash flow and debt, you won't be able to get your business off the ground.

It's essential to explore all your funding options, and if borrowing is your only option, work closely with your lender to ensure your business is financially able to handle the commitment. Personal assets are often on the line when it comes to small businesses.

Related reading: Small Business Venture Funding

Using accounting software like Freshbooks or Quickbooks can help you track your expenses throughout each month and during tax season. This can be especially helpful for small business owners who are just starting out.

To determine your financing methods, consider your costs and projected cash flow. You may need to pursue funding through personal savings, loans from family and friends, government and bank loans, or government grants.

According to Herndon Davis, mortgage loan officer and real estate agent at Mortgage Real Estate Services, most startups are self-funded. However, there are other options available, such as establishing business credit and different lines of credit through piggybacking scenarios.

Here are some common funding sources for small businesses:

Underestimating costs can decimate your company. According to Cynthia McCahon, founder and CEO of business plan software company Enloop, writing a business plan without basing your forecasts on reality often leads to an unfortunate, and often unnecessary, business failure.

To properly manage your business's cash flow, differentiate between one-time and ongoing costs. One-time expenses, such as incorporating a company, will be relevant mostly in the startup process. Ongoing costs, such as utilities, are paid on a regular basis and generally do not fluctuate as much from month to month.

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Here are some common startup expenses to consider:

Typical costs for a startup company with five employees can include:

Drew Gerber, CEO of the PR firm Wasabi Publicity, estimates that an entrepreneur will need six months' worth of fixed costs on hand at startup.

This week was a mixed bag for startup funding, with fintech taking center stage. Fintech startup SarvaGram raised a whopping $67 Mn in its Series D round.

Lightspeed was the most active investor this week, backing three startups across different sectors. They invested in edtech Bhanzu, agritech Wheelocity, and deeptech Airbound.

Seed funding remained relatively flat, rising only 10% to $5.9 Mn from last week's $5.4 Mn. This suggests that seed funding is still a relatively stable and consistent source of support for early-stage startups.

The Indian startup ecosystem saw a total of 7 deals in the enterprisetech sector this week, with startups raising a combined $46.7 Mn. This is a significant increase from previous weeks, indicating a growing interest in this sector.

Here's a breakdown of the top investors this week:

Indian startups are making waves in the market, and here are some notable updates. Swiggy's public market debut on November 13 saw its shares list at INR 420 on the NSE, a premium of nearly 8% from its IPO issue price of INR 390 per share.

Prosus, the largest stakeholder of Swiggy, is exploring an IPO for PayU in India in 2025. This could be a significant development for the fintech industry in the country.

Zetworks, a B2B marketplace, is looking to get listed by 2025 in an IPO that will see it raise over $1 Bn. That's a huge amount of capital for a startup.

BlackBuck's IPO saw a muted subscription of 32% ahead of market close on Friday, with the issue closing on November 18. This is a contrast to the enthusiasm seen in Swiggy's IPO.

Here are some key IPO updates in India:

Pavestone VC closed its Pavestone Technology Fund at $97 Mn, targeting 8-10 growth stage startups with an average ticket size of $5-10 Mn.

Ecommerce AI startup BiteSpeed raised USD 3.5 million to support its global expansion, planning to accelerate hiring efforts in marketing, sales, and technical departments.

Gardening startup Ugaoo secured Rs 47 crore led by V3 Ventures to expand its operations, with new hubs planned in Kolkata, Guwahati, Ahmedabad, and Lucknow, and retail stores set to open in Hyderabad and Delhi.

Here are some of the recent funding rounds:

This week, we saw some exciting funding rounds across various industries. Pavestone VC marked the final close of its Pavestone Technology Fund at $97 Mn, aiming to back 8-10 growth stage startups with an average ticket size of $5-10 Mn.

Ecommerce startup BiteSpeed raised USD 3.5 million to accelerate its hiring efforts and support global expansion.

The funding landscape is looking promising for startups, with Pavestone VC's managing partners Anup Jain and Rajeev Suri launching BlueGreen Ventures with a $75 Mn fund to back early-stage and IPO-bound startups.

Expand your knowledge: Vc Fund Structure

Let's take a look at the key funding rounds of the week:

Pavestone VC's Pavestone Technology Fund is looking to make a significant impact in the startup ecosystem, while Green Frontier Capital's India Climate Opportunities Fund is targeting a large corpus for climate investments.

A fresh viewpoint: Founders Pledge Climate Change Fund

In the recent funding rounds, several mergers and acquisitions have taken place that are worth noting. Proptech startup has bought an 11% stake in Mumbai-based real estate advisory Guardians for $12 Mn.

This move indicates the startup's intention to increase its stakeholding to 50% in the coming three years. Unicommerce has acquired a 42.7% stake in Shipway for INR 68.4 Cr.

Online travel aggregator EaseMyTrip has approved the acquisition of a 49% stake in Planet Education Australia for INR 39.20 Cr and a 50% stake in Jeewani Hospitality Private Limited for INR 100 Cr. Coimbatore-based SaaS startup Kovai.co has acquired US-based Floik to enhance its Document360 knowledge management platform.

Here's a summary of the acquisitions:

Firefly, a Texas-based space startup, has reached a valuation of over $2 billion in its latest funding round. This significant milestone highlights the growing interest in space technology and commercial spaceflight.

Firefly specializes in making small and medium launch vehicles for commercial launches to the earth's orbit. These vehicles offer a cost-effective solution for businesses and organizations looking to access space.

The company's Elytra line of orbital vehicles provides on-orbit services, including hosting, rideshare, delivery, and servicing missions. This innovative approach is revolutionizing the way we think about space exploration and utilization.