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July 26, 2016

Is the Spike in Bridge Rounds Bad News?


July has already seen 6 start-ups reporting bridge rounds - marking a spike in the number of such deals in recent months. The list of companies includes MyTaxiIndia ($1 M from Nihon Kotsu), Quickli (AVG Group & 500 Startups), and AppsDaily ($2 M from Kalaari Capital, Qualcomm Ventures, etc).

What qualifies as a Bridge round?

A bridge round is typically one where the company raises a sum smaller amount of funding than during its previous round. The investors in the round are also typically existing investors who have chosen to extend the company "extra runway".

The following table - extracted from a post on Bridge Rounds by US VC Paul Martino - provides the highlights of such a round:




Most of the recent Bridge Rounds in India are taking place either between the Seed and Series A or between the Series A and Series B stages.

Is the Spike in Bridge Rounds a Cause for Worry?

Not Really. While it is quite clear that providers of follow-on funding have become choosier,  the fact that Bridge Rounds are now going through means that existing investors are willing to back start-ups with more capital.  

More Bridges to Cross?

Between July 2014 - June 2015, as many as 216 startups had raised Series A funding. Of these, only 20% have managed to raise follow-on funding. 


Between July 2014 -  June 2015, 120 startups had raised Seed Funding - of which only 25% startups have raised their Series A round.


More than 250 startups, which between them have raised over $600 million in Seed/Series A funding, are now "overdue" to raise new money (ie, it's now 12+ months since their last round). 

Would you like the complete list of start-ups that seem to be struggling with their Series A / B rounds? Contact Varatha at bizdev@VentureIntelligence.com or +91-44-42185180.

Any other feedback / suggestions? Chime in in the comments.

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.