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Funding Analysis Jan 2022 - May 2022

With fewer investors knocking the doors of large fintech startups for Series C+ funding, there is chatter in the market that funding has dried up and that ‘winter has arrived’. However, has it? VCs are actively investing in Early Stage startups, and Series B has seen similar funding as last year. 37 startups have received Pre Series A funding totalling to USD 120 M as of May 2022, which is almost 50% of what the segment received during 2021. Series A has seen 17 startups receiving USD 429 M till now, which is only 9% less than what the segment received in the entirety of 2021. It’s summer for these startups! Series B has witnessed 10 startups receive USD 435 M and should close the year at par with what the segment received last year.

So why is everyone pressing the panic button?

Series C and beyond has seen less funding because of general negative sentiment worldwide. Only 11 startups received funding for these rounds, as opposed to 44 startups in 2021. With the war beginning in February of this year and the muted performance of startups that have launched their IPOs, investors are being more cautious in their investment approach. Additionally, Series C+ received a whopping USD 5B+ in funding in 2021. Some well funded startups have spent lots of capital to grow disproportionately without having any real revenue or profitability structure in place. Thus, investors are actually waiting for their portfolio to begin performing