INDIA DEAL PULSE REPORT Q3 CY23 November , 2023 Confidential and proprietary © 1Lattice Foreword How does Pulse help clients? © 1Lattice | 4 Foreword Foreword India has caught the attention of global investors due to its potential to become a $ 5 trillion economy by 2026 , a rapidly growing internet user base expected to reach 900 million by 2025 , and a thriving digital consumer market . This has led to increased investments from both domestic and international fund houses, driven by government - backed startup initiatives . While some recent investor exits have been less profitable, brands emphasizing value creation, like CaratLane , have experienced significant and positive exits . In the third quarter of the calendar year 2023 , startups in India secured ~US $ 3 . 1 B across 243 deals, spanning from seed to late - stage investment . While India has increasingly garnered attention as an attractive destination for growth - stage investments, recent quarters have continued to exhibit a noticeable decline in funding on the back of ongoing factors such as global economic uncertainty, increasing interest rates, valuation worries and the added pressure of profitability over scaling, all of which continue to weigh on the ecosystem . Despite the concerns, the future of India's funding landscape continues to hold promise, with Roma Dixit rising investments from global fund houses indicating their confidence in India’s growth Director, Financial Investors potential . This report aims to uncover some of the key trends during the third quarter of the calendar year 2023 . At 1 Lattice, we hold an optimistic outlook, believing that this report will provide valuable insights . We eagerly anticipate the opportunity to engage in an open dialogue with our partners across diverse industries, as we exchange notes and delve deeper into these matters while closely monitoring the evolving situation . © 1Lattice | 5 Key takeaways Key takeaways • Startups raised ~ US $ 3 . 1 B across 243 deals in Q 3 CY 23 , signaling a slowdown in total funding ( - 39 % ), while deal volume increased to 243 from 226 deals ( + 7 . 5 % ) compared to Q 2 CY 23 • Investments across stages experienced a significant decline, with growth stage suffering the largest drop ( ~ 60 % ) compared to previous quarter due to various ongoing factors such as global economic uncertainty , increasing interest rates & valuation worries • Early - stage deal volume increased to ~ 84 % from ~ 73 % as investors shifted their focus towards smaller investments in early - stage companies indicating that investors today are more cautious with their investments • Avg deal size fell by ~ 43 % to ~US $ 12 . 8 M as compared to previous quarter • SaaS / AI was the most attractive sector for early - stage investments ( ~US $ 234 M) & growth stage investments (~US $ 229 M) – New innovations solving real - life problems garnered major interest in SaaS / AI sector • Fintech attracted highest investments (~US $ 312 M) , followed by Enterprise Tech (~US $ 104 M) and Edtech (US $ 88 M) within tech investments for Q 3 CY 23 © 1Lattice | 6 Agenda Deal landscape in Q3 CY23 Key deals and investment themes Key investors Investment amount and # deals ~US$ 3.1B was raised in India by companies across 243 deals in Q3 CY23 Investment amount (US$ B) and # deals (Q3 CY22 – Q3 CY23) 432 362 Drop in funding due to f actors such as global economic uncertainty, rising interest rates, valuation anxieties & 296 global inflation 243 226 6.7 6.0 5.1 5.1 3.1 Q3 CY22 Q4 CY22 Q1 CY23 Q2 CY23 Q3 CY23 Amount Deals Note(s): Chart includes early (Pre - seed, seed, pre - series and Series A), growth (Series B, C, D and E), and late (Series F onwards) stage investments, PIPE Source(s): 1Lattice Deals Database © 1Lattice | 8 Stage - wise investments Growth stage witnessed decrease in funding (~US$ 1.6B) compared to last quarter Investment amount (US$ B) and # deals (Q3 CY22 – Q3 CY23) 432 362 Drop in growth stage funding 1.8 0.4 due to poor exits, inflated 296 valuations & difficulty in attaining profitability 0.1 1.5 1.4 243 1.8 226 0.2 3.5 2.9 1.2 2.3 2.8 0.1 1.2 1.3 1.2 1.0 0.6 0.5 Q3 CY 22 Q4 CY22 Q1 CY23 Q2 CY23 Q3 CY23 Early Growth Late Others* Deals Note(s): Stage of investment here is decided by the round of investment. Pre - seed, seed, pre - series and Series A are classified as Early, Series B, C, D and E are classified as Growth, and Series F onwards are classified as Late. Others include deals with undisclosed round, PIPE, etc. Source(s): 1Lattice Deals Database © 1Lattice | 9 Average deal size Average deal size decreased to US$ 12.8M from US$ 22.5M in previous quarter Average deal size Deal volume by stage (US$ M, Q3 CY22 – Q3 CY23) (%, Q3 CY22 – Q3 CY23) 432 362 296 226 243 22.5 1% Avg. d eal sizes dropped as 3% 3% 5% 6% 1% 2% 4% investors are becoming 2% more cautious and investing 14% early - stage companies 16% 17.2 20% 16.6 20% 19% 15.5 12.8 84% 79% 76% 73% 73% Q3 CY 22 Q4 CY22 Q1 CY23 Q2 CY23 Q3 CY23 Q3 CY22 Q4 CY22 Q1 CY23 Q2 CY23 Q3 CY23 Early Growth Late Others* Note(s): Stage of investment here is decided by the round of investment. Pre - seed, seed, pre - series and Series A are classified as Early, Series B, C, D and E are classified as Growth, and Series F onwards are classified as Late. Others include deals with undisclosed round, PIPE, etc. © 1Lattice | 10 Source(s): 1Lattice Deals Database Agenda Deal landscape in Q3 CY23 Key deals and investment themes Key investors Top 10 investments Top 10 investments in Q3 CY23 Top 10 investments in Q3 CY23 Amount Company Sector Funding stage Key Investors (US$ M) Retail 995 PIPE Qatar Investment Authority Retail 250 PIPE KKR SaaS/AI 229 Growth Kedaara Capital StepStone Group, Goodwater Capital, Glade Brook Capital, Ecommerce & listing platforms 2 00 Growth Lachy Groom and Nexus Venture Partners Manufacturing 140 Growth Temasek Manufacturing 1 09 Late Hero MotoCorp and GIC Touring Capital,Grupo Carso, General Atlantic, SaaS/AI 8 5 Growth Celesta Capital and Chiratae Ventures SaaS/AI 6 0 Early BL Agro Oils Westbridge Capital, Accel, Tanglin Venture Partners, Beams Growth SaaS/AI 50 FinTech Fund ETS, Blume, DSG Consumer Partners, Kaizenvest, Consumer app & Platforms 40 G rowth Three state Capital Advisors Source(s): 1Lattice Deals Database © 1Lattice | 12 Early - stage investments SaaS / AI received highest funding ~US$ 234M among early - stage investments Top 10 early - stage investments in Q3 CY23 Early - stage investments, by sector (US$ M, Q3 CY23) Amount (US$ Company Sector Key Investors M) SaaS/AI 234 SaaS/AI 60 BL Agro Oils Consumer app & platforms 94 Consumer app & Tiger Global Management, Ecosystem Integrity 33 Platforms Fund,British International Invetments, Blume Manufacturing 42 SaaS/AI 30 A91 Partners Ecommerce & listing platforms 38 RTP Global,YourNest, Omidyar Network India, Global brain, Blume founder fund, Alteria Capital, Telecom 17 BFSI 31 Stride Ventures, Stride One, 9 Unicorn Telecom 27 Pantera Capital, Elevation Capital, Starkware, Consumer app & Spartan Group, Goodwater Capital, Upsparks 17 platforms Ventures, Protofund Ventures FMCG 18 Energy 15 SaaS/AI 15 Canapi Ventures and Nexus Venture Partners Transportation and logistics 12 Baring Private Equity Partners (BPEP), Promus Ventures, Omidyar Network India, xto10X, Force SaaS/AI 15 Healthcare & Life Sciences 13 Ventures, Luckbox Ventures, IndigoEdge Advisors Retail 6 Others include QSR, Consumer app & 1 12 Elevation Capital , Peak XV Partners Cloud kitchen and platforms Others 7 Advisory Blume Ventures, Matrix Partners India, Storm Energy 11 Ventures, Neon Fund Note(s): Early - stage investments include Pre - seed, Seed, Pre - series and Series A 1. Peak XV Partners (Erstwhile Sequoia India & SEA) © 1Lattice | 13 Source(s): 1Lattice Deals Database Top early - stage investments Top funded early - stage startups with their competitors Company Description Competitors Provides app - based end - to - end farm risk management solution to the farmers Developer of battery - swapping station network for electric vehicles Provider of SAP consulting services Provider of internet services Provides DeFi* trading spot that allows users to hold smarter & trade faster, only paying for what they trade Note(s): *DeFi – Decentralized Finance offers financial instruments without relying on intermediaries such as brokerages, exchanges, or banks by using smart contracts on a blockchain © 1Lattice | 14 Source(s): 1Lattice Deals Database Growth - stage investments SaaS/AI sector dominated growth - stage investments with funding of ~US$ 464M Top 10 growth - stage investments in Q3 CY23 Growth - stage investment, by sector (US$ M, Q3 CY23) Amount Company Sector Key Investors (US$ M) SaaS/AI 464 SaaS/AI 229 Kedaara Capital StepStone Group, Goodwater Capital, Ecommerce & Listing E - commerce & listing 256 200 Glade Brook Capital, Lachy Groom, Nexus Platforms platforms Venture Partners Manufacturing Manufacturing 140 Temasek 140 Touring Capital, Grupo Carso, General SaaS/AI 85 Atlantic, Celesta Capital, Chiratae Ventures Consumer app & platforms 129 Westbridge Capital, Accel, Tanglin Venture SaaS/AI 50 Partners, Beams FinTech Fund Healthcare & Lifesciences 53 Consumer app & ETS, Blume, DSG Consumer Partners, 40 Platforms Kaizenvest, Three state Capital Advisors BFSI 50 BFSI 40 Dai - ichi Life Holdings QSR 35 Healthcare & Creaegis, Eight road ventures, F Prime 35 Lifesciences Capital Transportation & logistics Fin Capital, Vertex Ventures,Tru Arrow 26 Partners, Point72 Ventures, BDMI, the SaaS/AI 35 family office of Aglae Ventures, Mantis VC, FMCG GOAT Capital 23 Ecommerce & Listing Premji Invest, A91 partners, Alteria Capital, 35 Platforms Aditya Birla Ventures Note(s): Growth - stage investments include Series B, C, D and E © 1Lattice | 15 Source(s): 1Lattice Deals Database Top growth - stage investments Top funded growth - stage start - ups with their competitors Company Description Competitors Real - time credit - decisioning platform and data aggregation APIs Application based platform offering on demand grocery delivery service Developer of industrial and warehousing parks Codeless AI infrastructure for marketing Enrollment management platform for colleges AI and cloud - based software for debt recovery solutions Source(s): 1Lattice Deals Database © 1Lattice | 16 Late - stage investment Late - stage investments were driven by manufacturing (~US$ 109M) Late - stage investment, by sector (US$ M, Q3 CY23) Top late - stage investments in Q3 CY23 Amount Company Sector Key Investors (US$ M) Manufacturing 109 Manufacturing 109 Hero MotoCorp and GIC Ecommerce & Ecommerce & listing Undisclosed 23 23 listing platforms platforms Note(s): Late - stage investments include Series F onwards Source(s): 1Lattice Deals Database © 1Lattice | 17 Top late - stage investments Top funded late - stage start - ups with their competitors Company Description Competitors Developer of electric scooters Online marketplace platform offering multi - category home products Source(s): 1Lattice Deals Database © 1Lattice | 18 Tech investments Fintech attracted highest investments (~US$ 312M), followed by EnterpriseTech (~US$ 104M) & Edtech (US$ 88M) within tech investments for Q3 CY23 Top 10 tech investments in Q3 CY23 Tech investments, by sector (US$ M, Q3 CY23) Amount Sector Key Investors Company (US$ M) Fintech FinTech 229 Kedaara Capital 312 EnterpriseTech 104 AgriTech 60 BL Agro Oils Westbridge Capital, Accel, Tanglin Venture EdTech 88 FinTech 50 Partners, Beams FinTech Fund AgriTech ETS, Blume, DSG Consumer Partners, Kaizenvest, 63 EdTech 40 Three state Capital Advisors HealthTech 61 HealthTech 35 Creaegis, Eight road ventures, F Prime Capital Media & Entertainment 55 Fin Capital and Vertex Ventures, Tru Arrow Partners, EnterpriseTech 35 Point72 Ventures, BDMI, Aglae Ventures, Mantis VC, Cloud services 37 GOAT Capital 360 ONE Asset, Dallas Venture Capital, Kae LogisticsTech EdTech 30 32 Capital, KOIS, Lumos Capital Group EnterpriseTech 30 A91 Partners HRTech 26 LogisticsTech 30 Creaegis, Inflexor Ventures Blockchain 22 Others includes Media & The Fundamentum Partnership, International Finance ConstructionTech, FoodTech, 25 Others 40 Entertainment Corporation (IFC), Vertex Ventures SpaceTech & more Source(s): 1Lattice Deals Database © 1Lattice | 19 Top 10 M&As* Top 10 M&As* in Q3 CY23 Top 10 M&As* in Q3 CY23 Amount Acquired Company Sector Date Acquirer (US$ M) SaaS/AI 7 11 Jul 17, 2023 Healthcare & Life 6 80 Sep 21, 2023 Sciences Engineering & 6 00 Aug 04, 2023 Construction BFSI 1 78 Aug 09, 2023 Retail 9 0 Jul 21, 2023 Healthcare & Life 72 Sep 20, 2023 Sciences * Automotive 6 5 July 10, 2023 Healthcare & Life 4 4 Jul 26, 2023 Sciences Healthcare & Life 3 5 Jul 17, 2023 Sciences Media & Entertainment 2 1 April 19, 2023 Note(s): Includes top M&A deals whose amounts were disclosed * Sobek Autos consists of OLX Autos © 1Lattice | 20 Source(s): 1Lattice Deals Database Agenda Deal landscape in Q3 CY23 Key deals and investment themes Key investors Active investors Most active investors of Q3 CY23 Growth - stage investors Early - stage investors Late - stage investors (# deals) (# deals) (# deals) 11 3 1 7 3 7 3 Early - stage 7 investors 1 found SaaS/AI & 3 6 consumer app/platform sectors most 6 SaaS/AI 2 appealing for sector held funding the greatest 5 appeal for growth - stage 2 investors 5 1 2 5 5 Note(s): 1. Peak XV Partners (Erstwhile Sequoia India & SEA) Source(s): 1Lattice Deals Database © 1Lattice | 22 Active early - stage investors Most active early - stage investors and their investment segments in Q3 CY23 Ecommerce & Consumer app 2 listing Manufacturing Energy FMCG SaaS/AI Others Investors & platforms platforms - - - - - - - - - - - - - - - - - - - - - - - 1 - - - - Note(s): 1. Peak XV Partners (Erstwhile Sequoia India & SEA) © 1Lattice | 23 2. Others – Include Healthcare & Life Sciences, Transportation and Logistics, BFSI, Engg. & Construction, Telecom Source(s): 1Lattice Deals Database Active growth - stage investors Most active growth - stage investors and their investment segments in Q3 CY23 Ecommerce Consumer & listing app & Investors Energy Manufacturing FMCG SaaS/AI BFSI Others platforms platforms - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Note(s): Others includes Restaurant / Café, Healthcare & Lifesciences Source(s): 1Lattice Deals Database © 1Lattice | 24 1Lattice We enable better decision making Technology - backed business support that helps you 500+ 30% ENABLE BETTER annual engagements faster to outcomes DECISIONS 600+ 8 Deep on - ground insights that you can act on years domain practices expertise 4 offices, deep experience across geographies – India, the USA, Europe, MEA, and SEA regions 130+ 98% + team members accuracy One - ness of data and people networks to harness the collective power of data, network, and technology 100+ 2.5M towns & cities panel members Multi - faceted teams offering a stack of consulting, advisory, and research services 15+ 40:60 languages covered she/ he ratio We are here for you Let us know how we can meet your business requirement? 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