Start-up funding sees a decline; venture capital investments hit a five-year low

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Published: April 3, 2020 5:45:04 AM

In March 2020, the first half recorded 32 angel and seed deals, which has fallen to 15 deals in the second half of the month.

The quantum of deals across angel, seed, and venture capital has dropped by 8.4%.

Start-up funding in India witnessed a decline in the quantum of funds in the month of March due to Covid-19 outbreak, with venture capital funding touching a five-year low. Start-up activity started on a weak note in the three months of January to March 2020. Angel and seed funding saw 136 deals worth $131.22 million and venture capital 93 deals worth $1.85 billion. This is a five-year low in venture capital funding, according to VCC Edge. The quantum of deals across angel, seed, and venture capital has dropped by 8.4%, whereas in terms of value, it has decreased by 6.91% in comparison with Q1 2019.

“Venture Capital investors are now holding back their plan of start-up funding due to the fallout of economies in coping with the crisis,” the research firm said. Calling out uncertainty as a big challenge at present, Sahar Kumar, head research, VCCEdge, said, “International travelling restrictions has put a halt on fundraising activities as China is one of the biggest sources of funds for the Indian start-up ecosystem”.

In March 2020, the first half recorded 32 angel and seed deals, which has fallen to 15 deals in the second half of the month. Reducing risk appetite has further slowed down funding activity in April. According to VCCEdge, the largest early-stage deal witnessed in Q1 2020 is by InterviewBit. The startup raised $20 million from a group of investors, including Sequoia Capital, Tiger Global, and GFC Global Founders Capital GmbH. The largest early-stage deal in the month of March 2020 is by Artificial Intelligence (AI) powered sales assistance platform Salesken, operated by IStar Skill Development, which has raised $8 million from Sequoia Capital in its VC (Series A) round.

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