Average startup deal size in metros 8x to smaller cities: PrivateCircle

Metropolitan cities raised 99 per cent of total funds secured in February 2024 at an average of Rs 33 crores, with Tier II and III towns raising only 4 crores in average on comparison, a recent PrivateCircle research found.

This reflects that the average deal size for a Tier 1 city was eight times that of smaller towns.

Bengaluru, Mumbai and Delhi NCR emerged as the top fundraisers for the second month of the year, with Bengaluru leading investments at 53 per cent at Rs 2661 crore.

The startups which secured the highest deals were logistics startup Shadowfax at Rs 829 crore, Bengaluru-based electric mobility startup River at Rs 332.2 crore, and furniture rental RentoMojo at Rs 210 crore. 

Startups in Mumbai went on to secure Rs 922 crore, while Delhi NCR startups raised Rs 829 crore in funds. 

Pune and Hyderabad, fourth and fifth on the list, saw a steep decline but double-digit investments in the startup realm at Rs 240 crore and Rs 201.94 crore respectively.

The investments further declined to one-fourth for Jaipur at Rs 50 crore.

While Tamil Nadu capital Chennai and Gujarat’s Ahmedabad raised Rs 46 crore respectively, Kolkata was next at Rs 23 crore. The last on the top 10 list was Gujarat’s Vadodara at Rs 10 crore.

Angel funding took the lead in small-town startup investments, with almost 34 per cent of deals by the individual investors.

In contrast, 6 per cent of private equity (PE) and venture capital (VC) deals took place in startups from Tier II and Tier III cities.

No family offices invested in small-town startups in the month of February this year.

The startup investments were also 7 per cent  higher this month at Rs 5,039 crore, compared to Rs 4,707 crore in January. 

Compared to the same period last year, the funding jumped to almost double at 42 per cent.

The startup deal volume was also up 15 per cent on a month on month basis at 130 funding deals in February. These were 19 per cent higher than February 2023, when with 109 deals in February 2023.