TICE Funding Report: Builder.ai & PhonePe Lead Funding Rounds

Indian startups have shown remarkable performance during the fourth week of May, specifically between the 20th and 27th of May. According to the funding report by TICE, a total of 15 Indian startups secured impressive funding amounting to approximately USD 444 million. This marked a substantial increase compared to the funding raised by Indian startups in the previous week.

One notable funding round was led by Qatar Investment Authority (QIA), with London-based Builder.ai raising $250 million in a Series D round. 

Builder.ai raised the largest funding for this week, with PhonePe securing the second largest funding with an investment of USD 100M from General Atlantic. 

Key Takeaways for the 4th Week of May

• 15 Indian startups secured approximately USD 444 million in funding during the fourth week of May.
• Builder.ai raised $250 million in a Series D round led by Qatar Investment Authority (QIA).
• PhonePe secured the second-largest funding of USD 100 million from General Atlantic.
• Nykaa experienced a 71% drop in net profit, while Info Edge reported a net loss for the first time in six years.
• The Indian government introduced new regulations regarding angel tax, providing more flexibility for non-resident investments.
• Baron Capital Group reduced Swiggy's valuation by 10% to $6.38 billion as of March 31, 2023, following a previous valuation decrease of 34% in December 2022.

The fundraising activity in the Indian startup ecosystem has been quite impressive. The USD 444 million raised between May 20 and May 27 marks a significant increase from last week which saw USD 72 million raised between May 13 and May 20, across 17 deals.

However, the fourth-quarter results of companies like Nykaa and Info Edge have not been well received. Nykaa witnessed a 71% drop in net profit, while Info Edge reported a net loss for the first time in six years. These results highlight the challenging economic environment for businesses.

Alongside these developments, the government has introduced new regulations regarding angel tax. Although these regulations offer more flexibility, certain provisions may still impede capital inflow into the country.

The Indian government has recently eased the Angel Tax Rules for non-resident investments, bringing potential relief for startups seeking funding from foreign countries. This relaxation specifically applies to non-resident investors from 21 countries and sovereignties, including the United States, Japan, Australia, Germany, and Spain. The Central Board of Direct Taxes (CBDT), on May 24, announced the exclusion of certain investor categories from the angel tax provision. This includes entities registered with the Securities and Exchange Board of India (Sebi) as category-I Foreign Portfolio Investors (FPI), endowment funds, pension funds, and broad-based pooled investment vehicles from the 21 specified nations.

Baron Capital Group, an asset management firm based in the United States, has further decreased the valuation of Swiggy, a food and grocery delivery company, by 10% to $6.38 billion as of March 31, 2023. Previously, in December 2022, Baron Capital had already marked down Swiggy's valuation by 34% to $7.1 billion.

Funding Report for the 4th Week of May