The Week Money Changed Hands
SRF Capital Studio Research DeskFunding Intelligence, SRF Capital StudioStartups raised $58.9 Mn. About twice that moved between shareholders, and no funding total counted a rupee of it.
Summary
- Indian startups raised $58.9 Mn across 14 deals, down 82% on the week before. One round, Flam's $40 Mn Series B, was 68% of it.
- The bigger flow was invisible to that total: Rentomojo's IPO sold ₹1,105.57 Cr of existing shares, about $115 Mn, which is close to double the week's entire startup funding.
- A funding number counts money going into companies. It does not count money going around them, and this week almost all the volume was the second kind.
- $58.9 Mn raised by startups in five days
- 82% below the week before
- 14 deals tracked, 12 with disclosed amounts
- 68% of the week's money was one round
- ₹1,105.57 Cr of existing shares sold in the Rentomojo IPO
Why $58.9 Mn is the wrong number to read
On the surface this was a bad week. Indian startups raised $58.9 Mn between 14 and 18 September, down 82% from $321.9 Mn the week before (Inc42, 19 Sep 2026). One deal, Flam's $40 Mn , made up roughly 68% of everything. Take Flam out and the other eleven disclosed rounds come to about $19 Mn. The median deal was around $1.25 Mn, by our calculation from the same data.
Figure 1 / Weekly funding, eight weeks to 18 September
Total funding (USD Mn)
- 142.327 Jul
- 247.43 Aug
- 139.510 Aug
- 233.217 Aug
- 210.324 Aug
- 176.531 Aug
- 321.97 Sept
- 58.914 Sept
If you stop reading there, the conclusion is simple. Investors went quiet.
That conclusion would be wrong. Money did not stop moving this week. It moved in a different direction. Large amounts changed hands between old shareholders and new ones, through sales, IPO share sales and exits. Very little of it reached a company bank account as fresh cash.
Money did not stop moving this week. It moved in a different direction.
That difference, between money that goes into a company and money that goes around it, is the subject of this brief. It shapes how rounds are priced, how cap tables get cleaned up, and how early investors get paid.
What is the difference between primary and secondary money?
Primary capital is new money going into the company
When a startup issues new shares and an investor pays for them, the cash goes into the company. That is primary capital. It pays for hiring, product and expansion. It also dilutes, because there are now more shares and every existing holder owns a smaller slice.
A simple example. A company has 100 shares and issues 25 new ones to an investor. The company receives the cash. A founder who owned 60 shares used to own 60%. She now owns 60 out of 125, which is 48%.
Secondary capital is old shares finding a new owner
In a secondary transaction, an existing shareholder sells shares they already own. The cash goes to the seller, not to the company. No new shares are created, so nobody is diluted. The company's bank balance does not change at all.
Same example. An early investor sells 10 of its shares to a new fund. The company still has 100 shares. Ownership has simply moved from one name to another.
- Primary: the investor pays the company, the company issues new shares. The company gets cash and everyone dilutes.
- Secondary: the buyer pays an existing shareholder for shares that already exist. The seller gets cash, nobody dilutes, and the company sits outside the transaction entirely.
Why secondaries exist: the fund clock
Venture funds are not permanent pools of money. A typical fund has a fixed life, often around ten years, sometimes with short extensions. Terms vary by fund. By the end of that life the fund has to return cash to the people who gave it money, its limited partners.
This is why those partners increasingly judge a fund on DPI, or distributions to paid-in capital. In plain terms: for every rupee put in, how many rupees has the fund actually paid back? Paper gains do not count. Only realised cash does.
So a seed fund that invested in 2018 and still holds a promising private company has a problem. The company may be doing well, but the fund's clock is running out. A secondary sale solves that.
An IPO is a secondary event too
Most people think of an IPO as a company raising money. In India a large part of many IPOs is an Offer for Sale, where existing shareholders sell their shares to public investors. The fresh issue goes to the company. The Offer for Sale goes to the sellers. Keep that split in mind for the rest of this brief.
Which companies actually got new cash this week?
Here is every round tracked this week. Five of them carry most of the signal, and we look at those below.
| Startup | Sector | Round | Amount (USD) | Lead investor |
|---|---|---|---|---|
| Flam | Enterprise Services (Advertising) | Series B | $40 Mn | QED Investors |
| DheyaTech | Advanced Hardware (Aerial) | Pre-Series A | $5.1 Mn | Avaana Capital |
| VerifAIX | Advanced Hardware (Semiconductor) | Seed | $5 Mn | Endiya Partners, Bluehill VC |
| Firi | Consumer Services (Quick Commerce) | Seed | $3 Mn | 360 ONE Asset |
| Enlight Metals | Enterprise Services (Manufacturing) | Undisclosed | $1.5 Mn | Exar North Group |
| Kiddo | Consumer Services (Quick Commerce) | Pre-Seed | $1.3 Mn | Campus Fund |
| True Artis | Health Tech (In-Clinic) | Seed | $1.2 Mn | Zeropearl VC |
| Factrika | Enterprise Services (Manufacturing) | Seed | $928K | Info Edge Ventures |
| Ecosys | Consumer Services (Hyperlocal) | Pre-Series A | $521K | GVFL Prarambh Fund |
| MoroMaa | Ecommerce (D2C) | Undisclosed | $156K | AJVC |
| Slayd | Ecommerce (Enablers) | Undisclosed | $156K | AJVC |
| Beijan | Advanced Hardware (Defence Tech) | Undisclosed | $156K | AJVC |
| Darwinbox | Enterprise Tech (Horizontal SaaS) | Secondary | Undisclosed | Teachers' Venture Growth |
| Zinara | Ecommerce (D2C) | Undisclosed | Undisclosed | Nikita Dutta |
Figure 2 / The twelve disclosed rounds, largest first
| Startup | Round size (USD Mn) |
|---|---|
| Flam | |
| DheyaTech | |
| VerifAIX | |
| Firi | |
| Enlight Metals | |
| Kiddo | |
| True Artis | |
| Factrika | |
| Ecosys | |
| MoroMaa | |
| Slayd | |
| Beijan |
Figure 3 / Where the money went, by business model
- B2B52.7 · 89%
- B2C6.3 · 11%
Figure 4 / Where the money went, by sector
| Sector | Funding (USD Mn) |
|---|---|
| Enterprise Services | |
| Advanced Hardware and Technology | |
| Consumer Services | |
| Health Tech | |
| Ecommerce |
Flam raised $40 Mn, and part of it was not new money
QED Investors led a $40 Mn Series B. Existing backers RTP Global and Dovetail doubled down. New names included Claypond Capital, Shah Rukh Khan's , Australian Gulf Capital, and the angels Martin Chavez and Olivier Pomel, the Datadog cofounder (Inc42 and Business Standard, 15 Sep 2026).
The round was a mix of primary and secondary. The cofounder told Inc42 that a small portion was secondary, and did not disclose its size. Valuation was not disclosed (Inc42, 15 Sep 2026).
Flam builds AI models and streaming infrastructure for interactive content. That means videos that change a product or a scene during playback, and 3D experiences through a phone camera. It says it signed more than 100 enterprise customers in six quarters, including Google (Pulse 2.0, 17 Sep 2026). More than half its business now comes from outside India, and it is targeting $100 Mn in ARR by next year (Inc42, 15 Sep 2026, company claims).
The founder says Flam is growing 70 to 80% quarter on quarter (YourStory, Sep 2026, company claim). Compounded, 70% a quarter is roughly eight times in a year. The prior round was a $14 Mn led by RTP Global in 2025 (Moneycontrol via TechNode Global, 15 Sep 2026).
Our read: even the week's biggest new-money deal carried a secondary slice. At Series B that is usually an early angel or seed holder taking partial liquidity. It is healthy when it is small. It becomes a warning when it is large next to the primary.
VerifAIX raised $5 Mn to check the work of AI
Endiya Partners and Bluehill VC co-led a $5 Mn , about ₹48 Cr, the company's first institutional money (Inc42, 16 Sep 2026). Valuation was not disclosed.
Before a chip is manufactured, engineers have to prove that the design does exactly what the specification says. That is called verification. A mistake found after manufacturing can cost months and millions. AI tools now generate chip design code faster than ever, which creates a new question. Who checks the AI?
VerifAIX's answer is a Formal Brain that combines AI reasoning with deterministic mathematical methods, so correctness is proven rather than guessed (Pulse 2.0, Sep 2026). The founders are Madhulima Tewari, Kenneth Roe and Avner Landver, with teams in the US, India and Israel (Inc42, 16 Sep 2026).
Our read: as AI generates more of everything, the scarce layer becomes trust. Verification businesses sell certainty, and that is a durable thing to sell.
DheyaTech raised ₹43 Cr to move engines from lab to factory
Avaana Capital led a ₹43 Cr round, about $5.1 Mn, reported as pre-Series A. The existing strategic investor Unimech Aerospace and Manufacturing took part (Inc42 and StartupTalky, 17 Sep 2026).
DheyaTech, founded in 2018, builds small gas turbine engines from 20 kgf to 400 kgf of thrust, for aerial platforms and power generation. Flight trials are targeted for the fourth quarter of 2026 (Indian Startup News, 19 Sep 2026). The founding team comes from GE Aviation and Rolls-Royce (YourStory, Sep 2026).
Our read: Unimech is a listed precision manufacturer and DheyaTech's manufacturing partner. When a supplier invests, it is a vote on production readiness. For hardware founders that kind of backer can shorten the hardest step, which is getting from prototype to certified production.
Firi raised $3 Mn for curated beauty in nine minutes
360 ONE Asset led a $3 Mn seed round, about ₹28.8 Cr, with Better Capital and CRED founder Kunal Shah (Inc42, 16 Sep 2026).
Firi's founders are both former Uber India executives. They use AI to scan reviews and ingredient lists, and say they analysed over 50 million reviews to shortlist about 3,000 products from roughly 300,000 (Indian Startup News, 19 Sep 2026, company claims). The company ran a pilot from January 2026 and began full operations in September. It claims an average order value nearly twice that of the large beauty platforms (RetailIntel, Sep 2026, company claim).
Our read: Firi and Kiddo, which raised a $1.3 Mn pre-seed, are both betting that quick commerce splits into specialist verticals. The test is simple. Can a narrow catalogue earn enough per order to pay for a dark store?
Darwinbox appears in the funding table and received nothing
Teachers' Venture Growth, the late-stage arm of the Ontario Teachers' Pension Plan, made a follow-on investment in the HR tech Darwinbox. Inc42 reported the deal as entirely a secondary share sale. The seller and the amount were not disclosed (Inc42, 15 Sep 2026).
Teachers' Venture Growth first invested in August 2025, leading a $40 Mn round that mixed primary and secondary at a blended valuation of about $1 Bn (CXO Digitalpulse, Sep 2026). One report puts this new cheque at around $40 Mn as well, but that figure is unconfirmed.
Our read: Darwinbox sits in the week's funding table and got no new cash. It shows what a secondary buyer is after, which is a larger stake in a company it already knows, with no added for the founders.
Where the real volume was: money that never reached a company
88% of Rentomojo's IPO went to its sellers
Rentomojo's ₹1,255.57 Cr IPO had a fresh issue of ₹150 Cr and an Offer for Sale of ₹1,105.57 Cr (5paisa, Sep 2026). About 88% of the money raised went to existing shareholders rather than to the company.
Demand was strong. The issue was subscribed 72.89 times, with the institutional portion at 177.29 times. Shares listed on 17 September at ₹482.45, a 19.4% premium to the ₹404 issue price (5paisa, Sep 2026). Early backers such as Accel got strong returns (Inc42, 19 Sep 2026).
At roughly ₹96 to the dollar, the Rentomojo Offer for Sale alone was about $115 Mn by our conversion. That is close to double the entire week's startup funding.
One IPO's secondary component was worth nearly twice the week's entire venture funding.
Figure 5 / New money against old money, 14 to 18 September
| Flow | Value (USD Mn) |
|---|---|
| Rentomojo IPO, shares sold by existing holders | |
| Startup funding, primary and mixed | |
| Rentomojo IPO, fresh issue to the company |
Figure 6 / What the Rentomojo IPO was made of
- Offer for Sale, to existing holders1105.57 · 88%
- Fresh issue, to the company150 · 12%
Yulu and 3one4: the fund clock in real life
3one4 Capital, which backed Yulu's seed round in 2018, announced a full exit through a secondary sale alongside Yulu's $93 Mn (Entrepreneur India, 17 Sep 2026). The Series C had $63 Mn of led by GEF Capital Partners, and $30 Mn of debt.
Yulu's chief executive said about $5.5 Mn of the equity bought out early seed investors nearing the end of their fund life (Laffaz, Aug 2026). That is the fund clock, playing out in public.
Here is the detail founders should notice. Yulu's was reported at around $170 Mn to $200 Mn, against more than $200 Mn raised over its life (Laffaz; RetailIntel, 2026). That looks flat or down for late investors. Yet 3one4 called its exit profitable, because it entered at seed prices. A secondary can be a win for an early investor even when the headline valuation disappoints.
Moneyview's sellers chose to sell less
Moneyview halved its IPO fresh issue from ₹1,500 Cr to ₹750 Cr. Existing investors also cut their Offer for Sale from up to 13.61 Cr shares to about 10.04 Cr, roughly 26% fewer by our calculation (Indian Startup News, 15 Sep 2026). The founders kept their portions unchanged (Inc42, 14 Sep 2026).
When investors choose to sell fewer shares into an IPO, they are usually saying they expect a better price later. Moneyview reported ₹2,773 Cr in revenue and ₹210 Cr in profit in the first nine months of FY26 (RetailIntel, Sep 2026).
A UPI fee reopened an exit door worth $10 Bn
The biggest policy story of the week was a merchant discount rate on UPI. From 15 October, merchant payments above ₹2,000 carry a 0.4% fee. Small merchants receiving up to ₹1 lakh a month are exempt (RetailIntel, 16 Sep 2026).
Bernstein estimates the fee could generate up to $1.1 Bn a year for payment apps by March 2028 (Reuters, 22 Sep 2026). With a clearer path to revenue, PhonePe is set to revive its IPO, targeting a listing between February and March 2027 at a valuation of about $10 Bn (Inc42, 19 Sep 2026). Earlier reports said Walmart, Microsoft and Tiger Global were expected to sell part of their holdings in that offering (Reuters, Jan 2026).
The link to this week's theme is direct. A policy change created a revenue model. A revenue model creates an IPO. An IPO creates the largest secondary event of all.
The smaller stake moves no total counted
Unstop acquired PerspectAI for an undisclosed sum. Lenskart paid ₹8 Cr for a further 1.8% of AjnaLens parent Dimension NXG, which implies roughly ₹444 Cr in valuation by our calculation. PB Fintech approved buying the remaining 20% of MyLoancare for ₹5 Cr (Inc42, 19 Sep 2026). None of these appear in a funding total.
Where does the next wave of new money come from?
While older money was cashing out, fresh money was being gathered one level up, at the funds themselves.
India Accelerator's Finvolve announced a first close of ₹90 Cr on its ₹250 Cr growth-stage fund, aiming at 30 to 35 companies. The AI-focused Activate closed its first fund at $105 Mn within a year of launch, targeting 25 to 30 AI startups. Dani Family Office's Asiana Fund and Taiwan's JC Capital launched a ₹1,000 Cr advanced manufacturing and innovation fund, with a ₹600 Cr primary corpus and a ₹400 Cr green shoe (Inc42, 19 Sep 2026). AJVC, the week's most active investor with three cheques, added the private equity firm Novastar Partners as a backer.
- Limited partners commit money to funds. Activate closed its first fund at $105 Mn this week.
- Funds write primary cheques. VerifAIX's $5 Mn seed is one of them.
- Companies grow. Flam says it is compounding 70 to 80% a quarter.
- Secondaries and IPOs return cash to those limited partners. Rentomojo's Offer for Sale and 3one4's Yulu exit both did that this week, and the cash goes back to step one.
That is the loop. When secondaries and IPOs return cash, the people behind the funds have both the money and the confidence to commit to new ones. New funds write new primary cheques. This week's exits are next year's seed rounds.
What should a founder do about this?
Five things, from the desk.
Read your for the split. Always ask how much of a round is primary and how much is secondary. A $40 Mn round with $35 Mn primary is a very different thing from one with $15 Mn primary. Your depends only on the primary number.
Know your investors' fund clocks. Find out the vintage year of every fund on your . A 2016 or 2017 fund will need liquidity soon. If you plan for it, you can offer a clean secondary in your next round. If you ignore it, the pressure arrives at the worst moment, usually as an investor pushing for a sale.
Use secondaries to clean up the cap table. A good one lets a new, patient investor replace a tired one. Darwinbox's pension-fund backer is exactly that kind of holder.
Treat founder secondaries with care. Small, sensible founder liquidity reduces personal financial stress and helps long-term decisions. Large founder sales in early rounds usually worry new investors. Keep it modest and explain it clearly.
Remember that exits fund your future rounds. A healthy exit market helps every founder, including those not raising yet. For corporate and multinational leaders there is a quieter point here too: buying existing shares builds a strategic position without the company issuing new stock.
What to watch next week
- Whether primary funding recovers from this dip, or whether the $58.9 Mn week is the start of a slower run.
- How the UPI merchant fee shapes valuations for fintech IPO candidates such as Fibe and PhonePe.
- The first cheques out of Activate's new $105 Mn AI fund.
- How Rentomojo trades once listing-day enthusiasm settles, because that sets the tone for every IPO behind it.
The single idea to carry into next week: when you read a funding number, ask which way the money is flowing. Into the company, or around it. Both matter. Only one pays for growth.
What we could not confirm
- Inc42's summary says twelve startups raised funds, while its body text and table list fourteen. We have used fourteen deals with twelve disclosed amounts.
- DheyaTech's round type is pre-Series A per StartupTalky and undisclosed per Inc42.
- The reported $40 Mn size of the Darwinbox follow-on, and the $1 Bn blended valuation from 2025, come from secondary reporting and are not officially confirmed.
- Yulu's Series C valuation is reported between about $170 Mn and $200 Mn across sources.
- Rupee conversions use about ₹96 per USD, the rate implied by Inc42's own conversions this week.
- Flam's growth rate, ARR target and customer counts, and Firi's review counts and order values, are company statements we have not independently verified.
This brief is for information only. It is not investment advice.
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SRF Capital Studio Research Desk
Funding Intelligence, SRF Capital Studio
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