‘Start-up funding sees revival in Q1’
Meesho was talking to Softbank, Tiger Global and others to raise about $300 million.
There are incipient signs that venture capital (VC) and private equity funding into startups, which have been on the ebb over the last 1518 months, are seeing distinct signs of revival. Many of the larger funds that had stayed away from India are returning in a big way.
Last month, there were reports of ecommerce player Meesho talking to Softbank, Tiger Global, and others to raise about $300 million, sending ripples across the startup space, which has been in the grip of a ‘funding winter’ since late 2022.
This is significant as it also means the Japanese mega investor is pressing the restart button in India after a hiatus of 18 months. It could encourage other investors, too, who have been watching from the sidelines as many startups in India have suddenly started having troubles in their operations and runins with regulators.
In the first quarter of 2024, VC investments in Indian startups crossed $2 billion from 183 deals, data from Venture Intelligence showed. This is double the investments seen in the December quarter. In fact, 2023 was the worst year for the sector, with startups churning in a little more than $7 billion compared with $25 billion in 2022.
While funding is still slightly lower than a year ago, analysts said the quality of financiers and ticket size are rising. Indian family offices are also stepping up. Media reports said Azim Premji’s Premji Invest was looking to invest $5070 million in graphic design tool startup Canva.
(The writer is with The Hindu businessline)