Bengaluru has emerged as the frontrunner in startup funding for February 2024, securing an impressive 53% share of the total funding, amounting to Rs 2,661 crore, as reported by PrivateCircle.
PrivateCircle Research’s analysis revealed that startups in Mumbai and Delhi NCR secured Rs 922 crore and Rs 829 crore in funding, respectively, during the same period, securing the second and third spots in the funding race.
Other notable cities in the top 10 list included Pune at Rs 240 crore, Hyderabad at Rs 201.94 crore, Jaipur at Rs 50 crore, Chennai at Rs 46 crore, Ahmedabad at Rs 46 crore, Kolkata at Rs 23 crore, and Vadodara at Rs 10 crore.
The study further highlighted a significant disparity in the funding landscape between Tier 1 and Tier 2, 3 cities. Tier 1 city startups accounted for a substantial 99% of the total funding raised in February 2024, leaving only 1% for Tier 2, 3 city startups. The average deal size for Tier 1 city startups was approximately Rs 33 crore, while for Tier 2, 3 city startups this stood at a mere Rs 4 crore per deal, indicating an almost eight-fold difference in deal sizes.
Moreover, angel funding emerged as the preferred investor type for Tier 2, 3 city startups, with almost 34% of angel deals occurring in these cities. In contrast, Tier 2, 3 city startups saw minimal participation in VC/PE deals, accounting for only 6%, while family offices showed no involvement.
The overall funding landscape witnessed a positive trajectory, with the total funding amount reaching Rs 5,039 crore in February 2024, marking a 7% m-o-m increase and a 43% y-o-y increase. In terms of deal count, February 2024 recorded 130 funding deals, reflecting a 15% rise from January 2024 and a notable 19% increase from February 2023.
The top three funding deals for February 2024 were secured by logistics services provider Shadowfax which secured Rs 829 crore in a series E round led by TPG New Quest, EV startup River which raised Rs 332.2 crore in a series B round led by Yamaha Motor Co Ltd, Japan, and furniture rental platform RentoMojo which raised Rs 210 crore in a Series D and D1 funding round led by Edelweiss Discovery Fund Series – I.
It’s important to note that the analysis conducted by PrivateCircle Research excluded debt and secondary rounds, focusing solely on funding raised by Indian-headquartered companies. The study defined startups as companies incorporated in 2008 or later, with Tier 1 cities including Ahmedabad, Bengaluru, Chennai, Delhi NCR, Hyderabad, Kolkata, Mumbai, and Pune.