May 2022 is the First Month in Which Startups Raise Less Than $2 billion

This year's funding winter began in the midst of a heatwave in May. According to a recent report by data analytics and consulting firm GlobalData, May is the first month of the year in which total funds raised fell below $2 billion.

“The decline in VC funding in May suggests that investors are increasingly becoming cautious in placing bets and startups are also realizing the impact of funding winter. In fact, May also witnessed the announcement of very few big-ticket deals above and equal to $100 million,” said Aurojyoti Bose, lead analyst at GlobalData.

Among these large-scale transactions were Zepto's $200 million round, Ather Energy's $128 million round, and Absolute's $100 million. Only one unicorn, neobanking startup Open, saw its value increase by more than a billion dollars in May.

Between January and May 2022, Indian startups raised a total of $13.3 billion.

Among Asia-Pacific (APAC) countries, Indian startups are only second to Chinese counterparts in terms of VC funding value during the last five months of 2022.

Funding for Indian startups has been slowing since April due to the fallout from the Russia-Ukraine war, an impending recession, and Fed rate hikes. According to experts, this will continue for another 12-18 months, if not 24 months.