The state of funding is an excellent gauge to assess the health of the startup industry An examination of the investment activity in July offers more reasons to be worried about a ‘funding winter’ that is the buzzword in startup towns.
After a surprisingly positive June, with $2.7 billion in funding collected through 128 deals, the 116 deals which contributed the startups to receiving $652.7 millions in July saw an increase of 75.9 percent.
Before we get into the details of the report that goes deep from Business Headers about the current state of the Indian startup industry in July, we would like to reaffirm our earlier analysis of startup funding in the first quarter of 2022. We had advised that the next quarter would be a crucial test to the startup ecosystem.
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The latest month’s total of $652.7 million raises the total fundraising for the initial seven months in 2022 to barely more than $17.7 billion. The value of the contribution from July however works out to be less than 3.7 percent of the total amount that were raised.
This means that July was crowned an instance of month that had the least funds so far this year, starting from May, which was 11.2 percent of the Jan-June 2022 total of $1.9 billion in the 139 deals.
Following July’s disappointing performance, May was responsible for 10.8 percent of all funds raised between January and July of 2022.
As a whole the month of July saw an 89.8 percent drop in fundraising, when compared to $6.4 billion in the 159 deals announced for July 20, 2021.
The sluggishness of Indian startup capital during the month of July 2022 can be felt across the stages. Although July’s 105 deals in the early stages were higher in quantity compared to the June’s 90 deals, which came in with $226.4 million, they’re less by 21.4 percentage when compared with $287.8 million in the 106 deals of April, which is the lowest fundraise of the month for the stage up to June.
In addition, having reached new lows for the month of July, deals for growth and late-stage agreements worth $308 million fell 50.4 percent and 85% respectively in comparison to their prior monthly lowests at $620.6 (May) as well as $778.8 million (June) respectively.
But, when viewed through the perspective of funding rounds, the washed-out summer of 2022 appears more pleasant.
Since, the 76 pre-series A deals totalling $99.9 million that were signed in July were higher than $90.8 million that was raised in the same number of deals the 76 deals in February. Additionally, $92.8 million across 13 Series A deals is better than the April’s $61.9 million raised across eight deals.
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For round numbers that were not disclosed the July deals of 19 of $176.6 million fell by more than 74.4 percentage points when compared to the year-to-date record of $691.4 million, with more than 24 deals recorded in May.
