☕️ A planned acquisition gone sour, a physical AI startup that’s crafting adaptive surfaces, a widening energy transition thesis, a control deal and two pure secondary transactions marked this week in private dealmaking. There’s also a new continuation fund brewing.
Welcome to Edition #45.
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Badminton legend Pullela Gopichand was among investors who backed a physical AI startup, one of two intriguing startups that raised capital this week. The other was a spacetech startup that’s building in-space servicing architecture for satellites. Overall, it was an outlier week for India’s PE-VC market with $635 million deployed across 24 deals, including two secondary-only transactions – Hero Motocorp’s stake increase in Ather Energy and a shareholder reshuffle in Epigamia.
Consumer was the busiest sector. Deals spanned coffee, skincare, pet care, astrology and kitchen appliances. The energy transition thesis widened to include companies addressing emissions embedded in construction materials and building materials.
Kedaara Capital’s investment for a controlling stake in a family-owned orthopaedic products company accounted for over a third of the total capital deployed during the week.
Apart from that deal, early stage investments dominated in volume terms with 13 deals at the seed through Series A stages.
→ Consumer
Nine consumer businesses closed deals worth over $116 million (including secondary transactions) with coffee chain Third Wave Coffee cornering nearly half of the capital deployed. The remaining deals, spread across pet care and astrology to kitchen appliances and skincare, were chiefly at the seed and Series A stages.
Third Wave Coffee raised a Rs 408 crore ($42.6 million) Series D led by existing investor WestBridge Capital, with Creaegis also returning to the cap table. The round included a secondary transaction. The Bangalore-based coffee chain operates more than 200 outlets and last raised capital in 2023 when Creaegis led a $35 million Series C.
The beauty and personal care category scored three deals. Asaya raised a $9.1 million Series A from RPSG Capital, OTP Ventures, Huddle Ventures, Hyperscale Ventures and 72 Ventures. The Bangalore-based skincare company develops products for Indian skin tones. Be Clinical, another skincare brand, raised a $2.1 million seed round led by Sauce VC, with V3 Ventures and Titan Capital participating. Kolors Healthcare, which provides weight loss, skin care and hair loss solutions at its offline clinics, raised Rs 215 crore ($22.5 million) from Piramal Alternatives.
Kitchen appliances brand Curaa raised $4.1 million in a Series A led by 3one4 Capital, with Kae Capital, Lumikai Fund and Better Capital returning.
Pet care and boarding company Scooby’s Club closed a $0.25 million pre-seed round with TDV Partners, the latest to raise capital in a category that’s started to draw investors again.
Online platforms offering astrology and spiritual services raised substantial rounds. InstaAstro (astrology) raised $12 million in a Series A led by Singularity AMC and Artha Venture Fund. Utsav, which facilitates spiritual and religious services, raised a Rs 36 crore ($3.8 million) Series A led by Atomic Capital, with Indian Quotient and Equanimity Investments participating.
Epigamia was a secondary deal. Early backers exited the company through a transaction valued at $20 million. Existing investor Verlinvest, Sauce VC and late founder Rohan Mirchandani’s family acquired stakes from DSG Consumer Partners and Deepika Padukone’s family office KA Enterprises, among others. Sauce VC founder Manu Chandra was an early angel investor in the dairy products company when it was known as Hokey Pokey.
→ Spacetech and physical AI
The most interesting companies that raised capital this week were InspeCity and Water Robotics.
InspeCity, incubated at IIT Bombay, is building spacecraft and robotic systems that can operate around satellites already in orbit, starting with inspections and lifespan extensions. The startup raised $10.5 million in a pre-Series A round led by existing backers Speciale Invest and Ashish Kacholia, the prolific public and private markets investor.
Antler India and Shastra VC were returning investors in the round, while Antler Elevate, Antler’s growth investments platform, came in as a new investor. The round followed a $5.6 million seed led by Kacholia last May.
InspeCity’s longer term ambition is to enable more complex in-space servicing, including docking, refuelling and de-orbiting. It has completed functional and environmental testing of its propulsion system and is planning four in-orbit missions over the next 12-18 months.
Water Robotics raised $2.5 million in seed funding led by Endiya Partners, with participation from Pullela Gopichand, Darwinbox founder Rohit Chennamaneni, Swiggy co-founder Nandan Reddy and other angel investors.
The physical AI company, headquartered in Delaware with its primary R&D operations in Hyderabad, is applying robotics and machine learning to furniture with the aim of making physical surfaces responsive to the humans who use them.
It is starting with furniture – FLOW, an adaptive chair focused on posture and movement, and CAMA (in pic above), an adaptive bed designed around sleep and recovery. The technology behind both products is a foundational model called VORTEX. The focus on consumer products gives the company access to data on how people interact with its systems and improve the underlying intelligence.
→ Peak XV, Nexus push deeper into the US AI stack
Indian venture capital firms continued to deploy into US-based companies. Peak XV Partners followed on in healthcare AI company Arintra and Nexus Venture Partners joined a round in AI research lab Deep Cogito.
Arintra raised $25 million in a Series B led by Define Ventures, with existing investor Peak XV Partners returning alongside YNHH Center for Health Care Innovation, Endeavour Health Ventures, Y Combinator, Counterpart Ventures, Ten13 and Spider Capital. The San Francisco-based company uses AI to automate medical coding and other parts of the revenue cycle for American health systems. It says its platform processes more than $5 billion worth of claims annually. The Series B takes the total funding raised to $51 million.
Deep Cogito, also based in San Francisco, is an AI research lab founded by former Google AI search executives. The company raised $43 million in a Series A led by TQ Ventures. Nexus Venture Partners participated alongside Benchmark, Atreides Management, South Park Commons and Zscaler. It’s developing post-training technology that aims to make AI models better at reasoning.
→ A control deal in healthcare
In the week’s biggest deal, by ticket size, Kedaara Capital deployed $200 million in Tynor Orthotics, its tenth bet in pharma and healthcare, in a transaction that multiple reports said would give it a controlling stake and provide an exit to Lighthouse Funds.
Mohali-based Tynor makes orthopaedic supports, mobility aids and rehabilitation and sports performance products. It operates a 6.5 lakh square feet manufacturing facility and retails through 300,000 outlets and 8,000 hospitals in India and overseas.
Lighthouse Funds and French medical textiles and orthotic soft goods maker Thusane, which entered in 2010, had co-invested Rs 143 crore in the company in 2019.
→ EVs and energy efficiency
Capital found its way into energy transition, but the week’s deals extended beyond electric vehicles (EV) and into technologies aimed at reducing energy consumption and industrial emissions. The mix suggests that investors are looking beyond the headline EV opportunity and at the underlying infrastructure needed to make the energy transition work.
Matter raised Rs 240 crore ($25 million) in a growth round anchored by existing investors. The company didn’t specify which of its investors had doubled down. The cap table includes Helena, Capital 2B and Japan Airlines. The Ahmedabad-based company manufactures electric motorcycles and has drawn up plans to launch four new motorcycle variants over the next two years.
Omega Seiki Mobility, which makes commercial EVs, raised $5.2 million from a group of investors including Sanjeev Agarwal Family Office, Unistone Capital and Brijesh Parekh Family Office.
CarbonStrong raised a $1.3 million seed round led by IAN Angel Fund and Rainmatter. The company is developing low-carbon concrete, targeting one of the construction industry’s largest sources of embodied emissions.
Akron AI raised $1 million in a pre-seed round led by Theia Ventures. The company is developing “high efficiency, electronically commutated (EC) fans”, which it says account for about 40% of building energy consumption.
Hero Motocorp disclosed that it would invest $184 million in EV maker Ather Energy through a secondary transaction, increasing its stake to 32.8%.
→ AI at the workplace
Three enterprise technology deals from the week focused on applying AI to specific operational tasks such as logistics, business processes and voice-based customer interactions.
Airbound, a startup that’s developing autonomous drones for logistics operations, closed a $37 million Series A round led by Greenoaks. DoorDash, the food delivery platform, joined as a new investor. Existing investors Lachy Groom, Lightspeed Venture Partners and Humba Ventures participated.
Runable closed a $21 million Series A led by Susquehanna Venture Capital and Nexus Venture Partners. Existing investors Together Fund and Array VC participated. The company, headquartered in Delaware with primary operations in Bangalore, offers small businesses general-purpose autonomous AI agents to run multiple tasks and processes.
Ringg AI raised $10 million in what it termed an “extended Series A” round, led by Peak XV Partners. The Bangalore-based voice AI startup had raised a $5.5 million tranche in January from Arkam Ventures, Groww Founder Fund, Whitecap Ventures, Capital2B and Cred founder Kunal Shah.
→ Other funding deals
Nexedge Capital raised $20 million from Mirae Asset Venture Investment and Elev8 Venture Partners in its first institutional round. The Delhi-based company offers wealth management solutions for affluent individuals and family offices. Logistic platform Oorjaa raised $1 million in a Series A round led by Equentis Angel Fund.
→ Two mergers and a deal gone sour
Healthify merged with Berry Street. C2i Semiconductors was snapped up by Infineon, delivering early exits for investors. And, Mamaearth called off its acquisition of Fluence.
Fabless chip company C2i Semiconductors agreed to be acquired by Munich-based Infineon Technologies. The financial terms of the deal were not disclosed. The Bangalore-based startup, which designs power management systems for AI data centres, had raised $16.7 million in a Series A round led by Peak XV Partners in February this year.
Fitness and nutrition services platform Healthify agreed to merge with Berry Street, a New York-based nutrition care company, in an all-stock deal. The financial terms of the transaction were not disclosed. Investors in Bangalore-based Healthify include Khosla Ventures, LeapFrog Investments, Blume Ventures and Claypond Capital. The company’s last funding round was in 2024 when it raised $45 million led by Khosla Ventures and LeapFrog.
Mamaearth parent Honasa Consumer called off its proposed acquisition of a 58% stake in nutraceuticals company Fluence Pharma, citing “non-fulfilment of closing conditions specified under Share Purchase Agreement…,” in a regulatory disclosure. When the deal was announced in June this year, Delhi-based Honasa had said it would establish a subsidiary, Honasa Health, to expand into the nutraceuticals market. The company said it would continue to evaluate opportunities, organic and inorganic, in nutraceuticals.
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Briefly
Siguler Guff is considering a $350-400 million India-focused continuation vehicle to stay invested longer in four assets – Bazaar Retail, Sterling Hospitals, Luker Electric and Relisys, Mint reported. Just last week, the New York-based alternative assets manager, which invests both through a fund-of-funds strategy and direct investments, closed $500 million in India-focused mid-market commitments for its Global Emerging Markets Growth Opportunities Fund (GEMGO II) and related co-investment vehicles.
Continuation funds have become popular lately as a liquidity mechanism for ageing portfolios. They allow fund managers to hold on to trophy assets and deliver exits to existing limited partners.
AI-focused venture capital firm Boundless VC closed its maiden fund at Rs 300 crore ($35 million), exceeding its original target of Rs 200 crore. Founded by former Kae Capital partner Natasha Malpani, the fund will invest primarily at the pre-seed and seed stages across the AI stack from infrastructure and chips to applications. It has already backed 10 companies.
Catch you again next week.
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