Early-stage startups are up against stronger filters for their next round of funding than before as the downturn in risk capital investing has investors taking a harder look at some of the ventures they funded.
A new study by data analytics platform Venture Intelligence showed only one in four startups that secure seed funding manage to raise follow-on capital in the form of a Series A round. In the last 12-15 months, several startups have been shuttered for the lack of product market fit.
These include Tiger Global and Peak XV Partners-backed software firm Toplyne, Elevation Capital and Lightspeed-backed edtech venture Bluelearn, Peak XV-backed artificial intelligence startup Nintee, and GSV Ventures-backed upskilling startup FrontRow.
While Toplyne raised a total of $17.5 million, Bluelearn and Nintee had raised $3.95 million and $3 million respectively in funding from venture capital investors before shutting down.
In line with the broader funding slowdown in India’s startup ecosystem, the number of companies that attracted series A funding in 2023 dropped by 45% to 127, down from 232 startups in 2022, the Venture Intelligence report showed. This is 23% below the average of 166 deals recorded over the past eight years ..
Early stage investing is all about risk taking…obviously the power law comes into play and so you will see a lot of startups shutting down after raising seed funding but that doesn’t create a negative force on the larger ecosystem. It is a healthy trend that those without a PMF (product market fit) take a call to move on without burning a single dollar more than is justified,” a partner of a Bengaluru-based early-stage firm said.
He added that this trend could rise as more investors take “bolder bets on the new AI wave.”
According to a report by 1Lattice, for the quarter-ended September 30, software-as-a-service and artificial intelligence (AI) were the most attractive sectors for early-stage investing garnering a total of $142 million. This includes a $27.5 million round for Mukesh Bansal’s AI startup Nurix.
Karthik Reddy, founder and managing partner of early-stage venture capital firm Blume Ventures that backed startups such as Unacademy, Purplle, Spinny and Exotel, said that the funding funnel takes a long time to develop and that short-term seasonality should not be confused with long-term averages.
“There’s a natural funnel anywhere in the world. You cannot have the same amount of series A players as you have seed players, and therefore there is always a rapid funnelling,” he said.
Source: The Economic Times
#healthcraestartup #startupdevices #dseide #startupfunding #startrups
A new study by data analytics platform Venture Intelligence showed only one in four startups that secure seed funding manage to raise follow-on capital in the form of a Series A round. In the last 12-15 months, several startups have been shuttered for the lack of product market fit.
These include Tiger Global and Peak XV Partners-backed software firm Toplyne, Elevation Capital and Lightspeed-backed edtech venture Bluelearn, Peak XV-backed artificial intelligence startup Nintee, and GSV Ventures-backed upskilling startup FrontRow.
While Toplyne raised a total of $17.5 million, Bluelearn and Nintee had raised $3.95 million and $3 million respectively in funding from venture capital investors before shutting down.
In line with the broader funding slowdown in India’s startup ecosystem, the number of companies that attracted series A funding in 2023 dropped by 45% to 127, down from 232 startups in 2022, the Venture Intelligence report showed. This is 23% below the average of 166 deals recorded over the past eight years ..
Early stage investing is all about risk taking…obviously the power law comes into play and so you will see a lot of startups shutting down after raising seed funding but that doesn’t create a negative force on the larger ecosystem. It is a healthy trend that those without a PMF (product market fit) take a call to move on without burning a single dollar more than is justified,” a partner of a Bengaluru-based early-stage firm said.
He added that this trend could rise as more investors take “bolder bets on the new AI wave.”
According to a report by 1Lattice, for the quarter-ended September 30, software-as-a-service and artificial intelligence (AI) were the most attractive sectors for early-stage investing garnering a total of $142 million. This includes a $27.5 million round for Mukesh Bansal’s AI startup Nurix.
Karthik Reddy, founder and managing partner of early-stage venture capital firm Blume Ventures that backed startups such as Unacademy, Purplle, Spinny and Exotel, said that the funding funnel takes a long time to develop and that short-term seasonality should not be confused with long-term averages.
“There’s a natural funnel anywhere in the world. You cannot have the same amount of series A players as you have seed players, and therefore there is always a rapid funnelling,” he said.
Source: The Economic Times
#healthcraestartup #startupdevices #dseide #startupfunding #startrups
Early-stage startups are up against stronger filters for their next round of funding than before as the downturn in risk capital investing has investors taking a harder look at some of the ventures they funded.
A new study by data analytics platform Venture Intelligence showed only one in four startups that secure seed funding manage to raise follow-on capital in the form of a Series A round. In the last 12-15 months, several startups have been shuttered for the lack of product market fit.
These include Tiger Global and Peak XV Partners-backed software firm Toplyne, Elevation Capital and Lightspeed-backed edtech venture Bluelearn, Peak XV-backed artificial intelligence startup Nintee, and GSV Ventures-backed upskilling startup FrontRow.
While Toplyne raised a total of $17.5 million, Bluelearn and Nintee had raised $3.95 million and $3 million respectively in funding from venture capital investors before shutting down.
In line with the broader funding slowdown in India’s startup ecosystem, the number of companies that attracted series A funding in 2023 dropped by 45% to 127, down from 232 startups in 2022, the Venture Intelligence report showed. This is 23% below the average of 166 deals recorded over the past eight years ..
Early stage investing is all about risk taking…obviously the power law comes into play and so you will see a lot of startups shutting down after raising seed funding but that doesn’t create a negative force on the larger ecosystem. It is a healthy trend that those without a PMF (product market fit) take a call to move on without burning a single dollar more than is justified,” a partner of a Bengaluru-based early-stage firm said.
He added that this trend could rise as more investors take “bolder bets on the new AI wave.”
According to a report by 1Lattice, for the quarter-ended September 30, software-as-a-service and artificial intelligence (AI) were the most attractive sectors for early-stage investing garnering a total of $142 million. This includes a $27.5 million round for Mukesh Bansal’s AI startup Nurix.
Karthik Reddy, founder and managing partner of early-stage venture capital firm Blume Ventures that backed startups such as Unacademy, Purplle, Spinny and Exotel, said that the funding funnel takes a long time to develop and that short-term seasonality should not be confused with long-term averages.
“There’s a natural funnel anywhere in the world. You cannot have the same amount of series A players as you have seed players, and therefore there is always a rapid funnelling,” he said.
Source: The Economic Times
#healthcraestartup #startupdevices #dseide #startupfunding #startrups
