According to Forbes, the industrial sector is the third best sector to invest in 2024, behind AI and the healthcare industry. It is due to its critical role in the global economy and its ongoing transformation with technologies like automation, robotics, and Internet of Things (IoT).

The Crunchbase data show the companies and startups in the industrial sector have raised $15.2 billion in funding rounds year-to-date, 80% more than in Q1 2023 and the highest quarterly figure in the market`s history. Statistics also show that, while the total funding amount increased, the number of funding rounds dropped, showing startups managed to raise more fresh capital in fewer funding rounds. Since the beginning of the year, these companies saw 14 VC investments, down from 26 in Q1 2023.

The Q1 funding amount in the industrial sector is even more impressive when compared to other top markets for VC investments. Statistics show industrial companies and startups have drawn 30% more fresh capital to finance their businesses than AI startups. Since the beginning of the year, companies working in the artificial intelligence space raised $11.6 billion, or $5 billion less than in the same period a year ago.

Healthcare startups are also far behind when it comes to VC funding activity. Over the past three months, companies in the healthcare industry raised $7 billion in funding rounds, or twice less than the industrial companies.

With $15.2 billion of fresh capital poured into the industrial sector year-to-date, the cumulative funding amount in this market jumped to $122.1 billion. Interestingly, more than half of that value was raised in the past two years.

Statistics also show that despite leading the chart of the most funded markets in 2024, the industrial sector loses the race with AI and healthcare companies when talking about cumulative funding. AI companies have raised over $355 billion, nearly three times more than startups from the industrial sector. Healthcare companies have also raised much more money, or over $229 billion so far.

The full story and statistics can be found here: https://altindex.com/news/industrial-sector-leads-vc-funding

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The research report also suggests that for agritech players to build and scale the business model around Green Financing, they would need catalytic effort, collaborations and partnerships. Additionally, most farmers, especially small-holder farmers, would need financial incentives to shift from existing practices to adopting new technologies for smart irrigation, soil and water conservation, building water ponds, sowing drought-tolerant seeds, and using integrated pest/nutrient management techniques. 

Commenting on the report, Hemendra Mathur, Venture Partner, Bharat Innovation Fund, and Co-founder, ThinkAg said, “It’s very timely to see an upswing in climate-solving innovations developed by young entrepreneurs for climate risk mitigation, adaptation and resilience. Climate-linked financing and insurance products need a lot of integration of technology for these models to scale. There is a need to build a strong public ecosystem and policy support for climate-solving agritech startups like the kind of interventions we see in other climate risk-related areas such as electric vehicles, mobility and pollution-tech.”

The report further states that the combination of policy, investments, catalytic capital, blended finance and innovations has the potential to solve climate challenges facing Indian agriculture. Government, policymakers, industry, funds, investors and startups have to work together to build long-term and ever-lasting solutions to make Indian agriculture climate resilient and sustainable.

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Prime Venture Partners announced Dr. Ashish Gupta as Partner Emeritus (Senior Partner) to strengthen its investment team. US-based Ashish is a renowned serial entrepreneur, angel investor, and VC, having co-founded Helion Ventures in 2005.

At Prime, Ashish will be part of the Investment Committee and actively involved in the decision-making process of all future investments at Prime. He will also serve as a mentor and advisor to the entire portfolio, the fund’s future strategies, and guide the team on several aspects of venture capital investing and portfolio management.

Started in 2012, Prime Venture Partners is an early-stage VC fund led by Sanjay Swamy, Shripati Acharya & Amit Somani. The fund also has a well-known serial entrepreneur, investor, and Aadhaar volunteer, Raj Mashruwala, as a Partner Emeritus.

Dr. Ashish Gupta said, “The Indian startup ecosystem is in a very vibrant phase of its evolution and Prime is well-positioned to be a key player in the building of Digital India. I’ve known all the partners Shripati, Amit, Sanjay, and Raj for the better part of the last 30 years and am delighted to be working closely with them in helping shape Prime’s next phase of growth.”

Ashish Gupta is a well-known and highly respected figure both in the Indian startup ecosystem and in Silicon Valley. He has been an early investor in startups that later became big such as Flipkart and MuSigma. Ashish serves on several boards including Ezetap, Pubmatic, Simplilearn, SMSGupshup, and Naukri. His other investments include Qwikcilver (acquired by Pinelabs), Daksh (acquired by IBM), MakeMyTrip, Upwork, Perfios, and Redbus.

Shripati Acharya, Co-Founder & Managing Partner, Prime Venture Partners said, “Ashish is just an incredible all-round person. As an entrepreneur, investor, mentor and friend, he has been the first person we’ve turned to for brainstorming over the years. Founders who interact with him even for a few minutes always appreciate his direct style and insights. We’re privileged to have him formally associated with Prime. This will be a huge step in helping us further improve the quality of our investment decisions, as well as an excellent value-add for our entrepreneurs building companies out of India and globally.”

With more than 25 companies in its portfolio, Prime is bringing a combination of first-hand entrepreneurial experience, operating expertise, and meaningful capital. With the addition of Ashish Gupta, Prime is looking to further boost its portfolio with early-stage investments in Fintech, SaaS, Enterprise, Healthcare, Education, and Logistics.

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The company, the shares of which rose to a record $40.90 on Tuesday on the Nasdaq, will have a war chest of more than $500 million with the completion of its latest round of fundraising, allowing it to take on the likes of Booking.com and newer domestic player Paytm among others, reports Economic Times.

“The fundamental belief was to bolster our arsenal, and to have the war chest available,” said Deep Kalra, chief executive of India’s largest travel operator, which is raising the money as it closes an equity financing round for a 9 per cent stake. “The use of the funds, or proceeds, will largely be inorganic.”

Kalra did not specify exactly how much the Gurgaon­headquartered company plans to set aside for potential acquisitions, but it’s expected to have over $500 million on its books after the latest funding round.

Expected to close on May 5, this will see the company raise $165 million from its existing backers, MIH Internet SEA Pte Ltd, a subsidiary of multinational internet and media group Naspers Ltd, and Chinese travel operator Ctrip.com International. Both investors will maintain their current shareholding, which stands at about 11 per cent for Ctrip and 43 per cent for MIH Internet.

The company will separately raise an additional $165 million through a private placement, under the terms of which it will issue about 4.5 million ordinary shares at $36 apiece.

Morgan Stanley India is acting as sole placement agent for the transaction, it said, without disclosing the identity of the investors. MIH Internet SEA had made a pro rata cash infusion of $82.8 million in MakeMyTrip in February, bringing the total cash and cash equivalents and term deposits of the company to an estimated $236.6 million as down 4.9 per cent, on the Nasdaq on Wednesday morning local time for a market capitalisation of $3.49 billion.

On the prowl

“We want to have a good enough kitty that allows us the flexibility to look at inorganic opportunities,” Kalra said. “We’re still in a scenario, where we are investing in the hotel’s space. Like I have said before, it’s not going to flip overnight, and we have to make sure that we have the fire power to do what it takes, to not only maintain leadership but grow it.”

Kalra engineered the largest M&A deal in the Indian internet space last year by merging his company with closest rival Ibibo Group. MakeMyTrip’s revenue from its hotels and standalone basis, contributing almost 67 per cent to overall revenue for the three months period.

The company is believed to be in talks with a number of ventures for potential investments and outright acquisitions. Last week, The Times of India reported that the Nasdaq­listed company was in talks to invest in smaller rival, online budget hotel operator FabHotels. This interest comes as MakeMyTrip has realised that building a good supply of hotels rooms is important for the business.

“In India, the challenge is not in terms of discovery of hotels, but the quality. That is why the hotels business can be built the way overseas players have built it,” said an investor briefed on the matter.

Global players check in

This comes as global travel operators such as Expedia and Priceline Group­backed Booking.com have set up shop in the country and are rapidly expanding their bouquet of services across the country. Apart from global players, local operators such as Oyo Rooms and Treebo Hotels have established a strong presence in the budget hotels space.

Newer entrants, such as Alibaba Group­backed Paytm have allocated a significant amount of cash to grow its travel business. In March, media reports stated that One97 Communications, which operates Paytm, had earmarked.`300 crore to ramp up its travel marketplace, while also expanding its team to more than 250 over the next twoquarters. “This (market) won’t become a bed of roses overnight,” Kalra said. “There will always be players, Indian or international, throwing their hat in, and hoping to get a piece of this very lucrative pie.”

After the merger with Ibibo Group, MakeMyTrip has also outlined aggressive plans to establish its dominance in the budget hotel segment. The online travel market is expected to grow from $11 billion in FY16 to $18.9 billion by FY20, according to an October 2015 Goldman Sachs report.

In the space, hotel bookings earn 15­20 per cent commission while air travel gets 6 per cent, making hotels a much more profitable proposition. In the last two years, action has shifted to this market.

In an earlier conversation, MakeMyTrip India chief executive Rajesh Magow had said that the company was forecasting up to 75 per cent of its overall top line to come from the hotels and packages segment over the next three to four years.

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BlackBuck, an online marketplace for inter-city logistics, has announced it has secured US$70 million in Series C funding from Sands Capital and existing investors.

The latest round of funding will be invested in building technology-led products for the freight industry to bring out efficiencies for, both, customers and truckers. The Bangalore-based company will also use a portion of the funds to scale up operations.

BlackBuck was founded in April 2015 by Rajesh Yabaji, Chanakya Hridaya and Ramasubraman, who together have 25 years of logistics experience.

BlackBuck is an online marketplace for inter-city trucking. It caters to long-distance in-land truck requirements of companies, providing them with a low-cost channel of freight procurement.

The company currently has over 1,00,000 trucks on its platform, present across 300 locations in the country. Its customers include Asian Paints, Unilever, Coke, Britannia, Godrej, Marico, Jyothy Laboratories and EID Parry.

In early 2015, BlackBuck had raised Series A funding of US$5 million from Accel Partners and Flipkart. Later, in December 2015, it secured US$25 million Series B round from Tiger Global and Apoletto (DST-Yuri Milner Founder Fund) with co-investment from Accel and Flipkart.

Speaking on the latest funding, Rajesh Yabaji, Co-founder and CEO, said, “At BlackBuck we are building products which will run logistics for the country in the near future. It is magical to see the infusion of technology in such an unorganised and fragmented field like logistics. Over the past couple of years, our understanding of freight dynamics has helped us create defensible frontiers in this industry. The journey going ahead is to fuel this revolution and enable the entire transportation ecosystem to converge towards it. This round of fund raise will help us invest much more aggressively in products & technology.”

According to Novonous market research, road freight is the largest transportation segment in India, constituting around 63% of the total freight movement and, is currently valued at $140 billion. Inter-city logistics accounts for a massive 95% of road freight movement; BlackBuck aims to revolutionize this large segment, removing bottlenecks and inefficiencies, using technology.

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Image Credit: Pixabay

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India, the third largest startup ecosystem, saw a country-wide funding of US$6.51 billion through 468 rounds throughout the year. Like Europe, India also had online retail and online travel as the most exciting technology sectors, together amassing US$1.1 billion across 52 rounds.

Bangalore-based startup research platform Tracxn brings you an infographic about 2016’s hottest sectors by VC activity in India.

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