A retrospective on 2023
In 2023, a year marked by market fluctuations and challenges, where the world faces ongoing economic, social, and geopolitical volatility, we’ve never been more optimistic, the challenges and opportunities this market brings.
Our dedication this year extended inwardly, working very closely with our portfolio founders ensuring follow-on capital for our portfolio companies. Our time was predominantly dedicated to engaging in one-on-one conversations where we provided extensive advice, emphasizing the importance of balancing growth with exceptional unit economics and a sensible business model. While encouraging growth, we underscored the significance of avoiding accelerated growth if it compromises sound unit economics.
In the current year, we once again had the privilege of supporting exceptional entrepreneurs looking to build enduring companies in spaces that we are deeply excited about.
We’ve made 14 investments this year — 4 in SaaS companies, 5 in Generative AI, 1 each in Consumer Tech, MarTech, New Gen Media, ML, and B2B Manufacturing.
Below is the list of companies that we proudly added to our portfolio:
1. Blockfenders
Blockfenders is a self-service data logistics platform as a service that automates and optimizes data pipelining, reducing costs by up to 90% compared to other solutions. It enables secure, easy, and compliant data movement and sharing, powered by built-in data governance, management, lineage, and privacy preservation, thus consolidating your data stack. Further, it streamlines your data supply chain and unlocks data across organizational boundaries, whether it’s in the cloud, on-premises, or from third-party sources.
2. TurboML
TurboML provides a platform for the complete lifecycle of real-time machine learning, from development to deployment, maintenance, and monitoring. A Real-time ML platform for fast-moving ML use cases where data freshness and low latency are essential.
Turbo ML is Real time Inference using streaming ML tech to Solve most advanced problems business face at sale while they use their ML/AI models.
3. Kusho
Kusho is an AI-native developer productivity platform for modern teams. Kusho is building autonomous AI agents that replace manual workflows. Kusho generates exhaustive tests for scenarios that can occur in production and executes them within your IDE.
4. Fleek
Fleek is India’s first subscription marketplace and management app with the best subscription offers, and the tools to manage all your subscriptions in one app.
5. Gloroots
Gloroots is building a SaaS platform that is solving the most critical problem of companies hiring at cross border, which has been increasing significantly across the globe as it gives a great chance to hire better talent. Gloroots offers simple SaaS which makes the entire hiring, Payroll, Insurance, Tax, Employee benefits in a single click and a comprehensive experience for the business.
6. Wokelo
Wokelo is a secure Gen-AI platform for accelerated business research. It helps create a customized in-depth analysis for market intelligence.
7. MarianaAI
MarianaAI combines custom AI models purpose-built for the healthcare industry with an easy interface and military-grade security. Mariana proprietary models are trained on millions of medical records to generate accurate transcriptions, codes, and documentation, and aid with clinical decision support.
8. Wizr
Wizr AI is the one-stop platform for enterprises to build their Gen AI apps and workflows quickly and securely, integrating with their data. Build and deploy LLM-based apps in a fraction of the time and cost compared to traditional methods.
9. Julep
Julep is an AI infrastructure lab making intelligence fun, unfettered & human. Julep makes AI model with emotive and empathetic capabilities intended for conversations and memory.
10. Hypergro
Hypergro.ai helps brands harness the raw power of user-generated content (UGC) and couples it with artificial intelligence. Hypergro.ai enhances brand revenue while reducing customer acquisition costs, and offers a streamlined and intelligent approach to marketing.
*Four company’s details have not been publicly disclosed. These are in the GenAI, SaaS, New-Gen Media, and B2B Manufacturing space.
A Cold Funding Winter!
Funding in India’s tech startup ecosystem in 2023 has been the lowest in the last five years, adding just 2 unicorns compared to 23 the previous year. This decline in funding extended across all stages, with a 70% decrease in early-stage funding, a 60% drop in seed-stage, and a significant 73% decline in late-stage funding.
Over the past 2–3 years, investors deployed huge quantities of capital extremely quickly, putting money into startups that were grossly overvalued, including some that never had a business model that made sense and probably never will.
Other startups had real businesses with good unit economics but were priced multi-fold higher than they probably should have been. It’s hitting companies that have bad unit economics or didn’t find product-market fit fast enough. It’s even hitting early companies with great business models, but are still burning too much money.
In a year dominated by unpredictability, we’ve found strength in keeping our portfolio companies resilient, navigating challenges, and fostering a culture of innovation to thrive in dynamic environments. We built resources designed to help them see their way through a downturn.
Upsparks Capital in numbers
- Total companies invested in — 75 (includes 15 investments made via syndicates during our early journey)
- Follow-on rounds — 28 companies
- Investment this year (2023) — 14
- Companies shut down with a complete loss of invested capital — 4
- Companies shut down and returned capital — 4 companies returned partial invested capital (0.2X to 0.5X)
- This year, we witnessed the remarkable resurrection of one of our portfolio companies.
Embarking on the journey into 2024
As we gaze into 2024, there are still storm clouds on the horizon of the global economy that could make recovery slower, but there are some promising signs ahead.
We remain steadfast in our commitment to advising our portfolio founders that they should reduce burn, extend runway, and become more capital efficient in order to navigate through potential market shifts and control their own destiny.
Despite Venture Capitalists sitting on a record amount of dry powder, the funding landscape remains challenging, with uncertainties impacting the pace and scale of investments.
The next few quarters are shaping up to be extremely hard for companies that are burning too much money, no matter their stage.
We are now in a new age of AI that will revolutionize productivity for individuals and organizations globally. This technological advancement holds the potential to address some of the most pressing challenges we face. The future is unfolding before us, driven by the limitless potential of AI to reshape and elevate our collective capabilities.
In the coming year, our investment focus will center around a few broad themes that align with our strategic thesis:
- Anything under B2B for India and global markets with a focus on SaaS, AI, and FinTech Infra.
- We want to take a dip in the Indian consumption story, considering investments in brands that show promising future for the new, aspiring Indian consumers.
- As always, we will continue to keep an eye on frontier tech companies that may be solving problems in Space Tech, Climate Tech, and the Circular Economy.
Together for the journey!
As we step into the new year, we bring in fresh objectives and a revived sense of energy.
We are intensifying our commitment to founders, walking alongside them through the initial phases, and navigating challenging environments together. Our support extends across all stages of the entrepreneurial journey, providing the necessary resources, contacts, experience, and assistance in fundraising rounds.
Hoping for a year filled with positivity and growth in the ecosystem.
Wishing you a safe, healthy, and joyous holiday season. Be kind 😀
️Best, ❤️
