My Funding Picks For The Last Week (W21)

Every Monday, I sit with my team to review the funding activity of the previous week. From that list, I pick out 3 companies that I would have loved to invest in or find founders that are doing similar things. Click here to know about my rationale behind this weekly exercise.

 

Another 2 weeks of lockdown (probably more for metro cities) should not dampen the investment spirits. Deal activity continues to temper, but it hasn’t completely stopped. Last week saw 13 startups raise $88 million – 8 of which were in the early-stage space.

After sifting through the news (aggregated from Tracxn, Inc42, and YourStory), I picked out these three as my favorite funding news from last week!

 

Name: Refrens

Amount Raised: Undisclosed from Vijay Shekhar Sharma, Anupam Mittal, others

What does Refrens do?

Edited from Traxcn: Refrens is accounting software for freelancers. The features of the product are expanding customer base by referrals, budget planning, creating GST invoices, reminders, and more. The product is free for freelancers such as software developers, logo and graphic designers, digital marketers, to name a few.

Why do I like Refrens?

The recent economic earthquake and the related job losses will give wings to the gig economy. Several platforms help gig workers promote their wares, but not many that will help them with organizing their back-end operations. The stellar angel investor star cast backing this deal should provide Refrens an edge over the indirect competition.

 

Name: Log9 Materials

Amount Raised: USD 164K from Deepak Ghaisas

What does Log9 do?

Edited from Traxcn: Log9Materials is a startup in the nanotechnology space. It focuses on graphene-based materials. Also, it undertakes custom synthesizing orders. R&D is centered on energy-efficient technologies based on graphene derivatives. As of November 2016, the company is developing graphene quantum dot-based LEDs and foldable displays and graphene composite based water purification systems. They have developed ‘Smoke-Free’- graphene-based cigarette filter and claims to reduce the risk of getting cancer by 90%.

Why do I like Log9?

I had looked at Log9 in the past when they were utilizing graphene-based technologies for fuel cells & filtration. However, their new product, CoronaOven could get serious traction as the importance of disinfecting things before using or consuming them is taken seriously. If the technology works as it is supposed to, there is a massive market for this product.

 

Name: Scribble Data

Amount Raised: Undisclosed from unnamed Angels

What does Scribble Data do?

Edited from Traxcn: Their platform, Enrich, helps prep data at scale (feature engineering) for data science, and our consulting services are aimed at turning every data science team into well-oiled machines.

Why do I like Scribble Data?

ML engineers love challenges. These engineers take on projects that test their skills and will build their reputation. Eventually, the projects get completed, and they venture out to find a new challenge, and the cycle repeats – but there could be a better solution. Scribble Data’s ML engineering as a service could offer exciting projects to keep ML engineers engaged but, at the same time, provide continuity at a more affordable & flexible payroll for the company. I have asked a couple of my portfolio company’s to reach out to Scribble and test out this hypothesis – the proof will be in the pudding.

My Favorite Funding News of Last Week (W16)

After a lull in funding to gauge the impact of the Covid19 pandemic, the fundraising activity is starting to pick up. Most of the rounds are investors topping up their investments into their investee companies to ensure survival through this period. However, a marked drop in valuations has also encouraged investors to return with the cheque books.

My team and I shortlisted the deals for week 16 from Traxcn, Inc42, and YourStory, and we jointly picked out the following as the best funding picks for the last week:

Name: AknaMed

Amount Raised: $7 million from LGT Lightstone Aspada

What does AknaMed do?

Edited from Traxcn: Technology-enabled supply chain platform, which increases transparency and optimizes costs for both hospitals and manufacturers.

Why do I like AknaMed?

I expect a significant shift in supply chain logistics in the post-COVID19 world with platforms like Zilingo, Coutloot, and Aknamed acting as the tech bridge to reduce cost and increase transparency for retailers or service providers. A significant impediment for the B2B supply chain space would be providing credit for the last mile. Whether Aknamed intends to solve that inhouse or through a financial institution tie-up will be interesting to track.

 

Name: Joynt

Amount Raised: Undisclosed from SOSV’s MOX accelerator

What does Joynt do?

Edited from Traxcn: Joynt is a social selling platform. It provides a platform that allows users to create content and connect with the audience and make money through sell subscriptions, digital products & more. It also provides an Android app.

Why do I like Joynt?

Joynt is the excellent cross between an artist discovery, artist booking platform with additional features like booking video lessons & video calls with your favorite performers. They rely on short videos instead of text to help buyers to discover artists, which is a step above the text-heavy platforms today.

 

Name: Plop

Amount Raised: Undisclosed from Better Capital, EaSyndicate, Rohit Chanana, and others

What does Plop do?

Edited from Traxcn: Plop now is a platform for fiction stories. It provides stories under various categories, including horror, romance, mystery, drama, and steamy. The stories are told in the form of messages or text, and Plop monetizes its platform through subscription.

Why do I like Plop?

Content platforms are making hay in the COVID19 lockdown, which explains the 400% rise in Plop’s traffic. However, I choose Plop over other content platforms for their unique delivery style over reading a book. I will keenly follow whether Plop can maintain this engagement in the post-COVID19 period.

 

Navigating the Indian Seed Landscape

No one can doubt that the Indian PE/VC ecosystem is going through a golden run. The amount of money flowing into the ecosystem is breaking records –records set just the previous year! If I narrow the PE/VC down to just “start-ups” then Indian start-ups have raised $11.3 billion this year – up from $10.5 billion raised last year – the good times are truly here.

This massive influx of money and strong tailwinds make it seem as though raising capital is getting easier. But, with the number of start-ups growing as fast (if not faster) than the money supply, the real picture for a start-up raising money today is – disconcertingly different. The discussion of what metrics does it take to raise a round, what the different stage VCs focus on when you raise, etc. is a polarizing topic. One that I regularly have now with founders who are raising, founders who have raised and with funders of all stages – but there isn’t a silver bullet.

Therefore, when Yuki Kawamura shared Pear VC’s report, aptly titled, Navigating the New Seed Landscape, he could not have sent it at a more opportune time. Mar Hershenson, Managing Partner of Pear VC, created this report analyzing the US VC ecosystem but there are several parallels we can draw for our ecosystem here. For example:  

  • It confirms something that seed investors have long known, i.e., the time, amount and metrics required to raise a Series A round has increased, therefore;
    • The money needed to get a venture ready for Series A has also increased
    • Series A investors want to see positive unit economics and traction before putting in growth rounds
  • Traction has a direct correlation to valuation
  • Second time and successful founders get a premium valuation
  • Where you locate your start-up does affect its initial valuation

There are several other learnings in the report, but the one slide that stuck with me is:

Just replace the names of columns (from the left) with Seed, Pre-Series A (or Angel), Series A, and Public to translate this to our ecosystem’s lingo. However, the vertical order in those columns stays the same
  • A seed investor (like me) backs the team
  • The angel investor backs the traction, and
  • The Series A investor backs the market.

The report then gets into further details as to what your start-up must emphasize when you are raising a new round. It provides a founder the VC view on where your venture must be before attempting to raise that the Seed, Angel, or Series A round. I believe that this presentation is manna for founders. I Whatsapp’d it to my founders in the morning. Now I share it with you!