Deal Roundup: Startup funding hits $550 mn mark on the back of growth rounds

Investments in India’s startup ecosystem reached the highest weekly total of the year after a handful of growth-stage internet companies attracted large cheques from blue-chip venture capital firms.

In all, 18 startups raised a total of $550 million, of which growth rounds accounted for nearly 90% of the total fundraising in value terms during the first week of September.

Edtech companies -- Unacademy and Eruditus -- led the week’s funding charts while food delivery platform Zomato, hyperlocal logistics platform Dunzo, and streaming platform Gaana received the backing of returning investors. Online home decor startups Livspace and Homelane attracted investments as well.

The week also saw the country’s largest retail chain Reliance Retail acquire a significant chunk of India’s second-largest offline retailer Future Group.

Early-stage venture capital firm 3one4 Capital and integrated incubator Venture Catalysts made headlines in the VC fund raising front.  

Funding

Unacademy: Sorting Hat Technologies, which runs edtech platform Unacademy raised $150 million in a growth funding round led by the SoftBank Group, becoming the latest entrant in the Indian unicorn club. The deal valued the company at $1.45 billion post money. This is an almost three-fold jump from its previous round of funding in February, which was led by General Atlantic and Facebook. Returning investors General Atlantic, Sequoia Capital India, Nexus Venture Partners, Facebook and Blume Ventures also participated in the round.

Eruditus: Eruditus Learning Solutions, which offers executive education programmes, landed $113 million in a Series D round co-led by growth equity firm Leeds Illuminate and consumer internet company and technology investor, Prosus Ventures. The round also includes secondary share sale. Chan Zuckerberg Initiative, founded by Facebook CEO Mark Zuckerberg and Dr Priscilla Chan also participated in this round besides returning investor Sequoia India and Ved Capital.

Livspace:  Home Interior Designs E-Commerce, which operates, online home decor startup Livspace, bagged a $90 million growth round this week, led by Swiss private equity firm Kharis Capital and Singapore headquartered investment firm Venturi Partners. New investors, including French investment company FFP, Peugeot Group’s holding company and Singapore-based global fund EDBI participated in the Series D funding round. They were joined by returning investors Ingka Investments, the investment arm of Ingka Group that runs Swedish furniture giant IKEA; TPG Growth, the mid-market and growth equity platform of private equity firm TPG; investment banking giant Goldman Sachs; Ratan Tata's UC-RNT Fund; and venture capital firm Bessemer Ventures.

Zomato: Foodtech startup Zomato secured Rs 456 crore (about $62 million) in a growth funding round from returning investor Temasek Holdings.

Gaana: Gamma Gaana, which operates music and podcast streaming platform Gaana raised Rs 375 crore (about $51 million) in debt from returning investors Tencent Cloud Europe and Times Internet.  Tencent Cloud Europe is a cloud compute service unit of Tencent.

Dunzo: Hyperlocal logistics platform Dunzo raised about $16 million (Rs 117.33 crore) from returning investors Google and Lightstone in a growth funding round.

WinZO: Vernacular esports platform WinZO scooped up $18 million, led by venture capital fund Makers Fund. The funding round also saw participation from Courtside Ventures, returning investor Kalaari Capital, Bengaluru-based consultancy firms IndigoEdge Management Consultancy and FinAdvantage Consulting, as well as WinZO co-founder Paavan Nanda.

Other startups that raised funding this week include train ticket reservation protection provider Railofy, artificial intelligence-enabled (AI) software maker for solar energy plants Sensehawk, electric vehicle maker Ultraviolette, online dating platform TrulyMadly, job tech firm Apna, consumer electronics brand Boat, digital publishing firm Quintype, B2B startup Bikayi, online pharmacy Medlife, decor platform HomeLane, mobile health platform Mfine, agritech startup AIBONO, and truck booking platform Trukky.

Fund

3one4 Capital: Venture capital firm 3one4 Capital launched its third early-stage VC fund ‘Fund III’ with a target corpus of $100 million (Rs 750 crore). The new fund takes the Bengaluru-based VC firm’s capital under management to over $210 million (Rs 1,550 crore).

9Unicorns: Mumbai headquartered integrated incubator Venture Catalysts announced the first close of its accelerator fund at Rs 100 crore ($14 million). The 9Unicorns Accelerator Fund has a target corpus of Rs 300 crore ($42 million).

M&A

Reliance Industries-Future Group: Reliance Industries’ retail division has announced the acquisition of Kishore Biyani-led Future Group’s retail and wholesale, and the logistics and warehousing businesses for a lump sum of $3.38 billion (Rs 24,713 crore). 

Infosys-Kaleidoscope: Information technology (IT) services firm Infosys acquired a 100% stake in product design and development firm Kaleidoscope Innovation for $42 million in cash.

Cyient-IG Partners: Hyderabad-based mid-tier IT services firm Cyient acquired Australian consulting firm IG Partners at an enterprise value of AUD $11.6 million (Rs 63 crore).