BackDeals digest: Funding activity plunges in post-Diwali week
Private equity and venture capital deals saw a significant decline in value and volume due to limited activity during Diwali week, with the total value of deals falling below $50 million for the first time in 2023.
PremiumBengaluru: Private equity and venture capital deals took a dive in both value and volume terms, as Diwali limited activity last week.
With no significant transaction, the total value of deals by private companies slumped to below $50 million, for the first time in 2023.
The phenomenon of a slump in funding in the post-Diwali week has been consistent over the last few fiscals.
Similarly, mergers and acquisitions (M&A) activity also slumped to one of the lowest recorded in the year, with only one deal inked in the consumer space during the week-ended Friday.
Startups secured $19 million, a 94% fall from the previous five-day period wherein the total deal value stood at $342 million.
Parallelly, deal volume last week fell significantly as seven PE/VC transactions were recorded in the five-day period.
In contrast, 30 deals were recorded in the previous five-day period, one of the highest recorded in the year.
This is the third time that the cumulative deal value for a five-day period has fallen below the $100 million mark. The last recorded instance occurred in April when startups managed to secure $75 million in funding.
However, this is also the first recorded instance of deal value dropping below the $50 million mark.
The current funding numbers also come at a time when deal flow in the startup ecosystem was stabilising to a large extent. As mentioned above, deal value had not fallen below the $100 million mark since April.
The sentiment was subdued even for small fundraises, which dominated funding activity in the last few months. Only a handful of startups managed to take home cheques in the $1-10 million range.
In last week’s largest transaction, healthcare-focussed fintech platform CoverSelf raised $8.2 million in a seed funding round, co-led by its existing investors 3one4 Capital and Beenext.
The round saw participation from new investor Z21 Ventures, among others.
Bengaluru-based Inito also raised $6 million in a Series A funding, led by Fireside Ventures. The round also saw participation from undisclosed family offices and angel investors.
The M&A space also witnessed a similar slowdown, as only one deal was inked last week as compared to three deals the week before that.
Milestone Alert!Livemint tops charts as the fastest growing news website in the world 🌏 Click here to know more.
