Venture capital and private equity firms have dry powder worth $590 billion globally, according to a report by financial services consulting company PricewaterhouseCooper (PwC). This amount was supposed to be invested in CY21 and CY22. Dry powder refers to the amount of committed but unallocated capital a firm has on hand. It is an unspent cash reserve that is waiting to be invested. The report, however, revealed that late-stage funding declined by 52 per cent in CY22. “The build-up of dry powder is due to a market pullback by VC funds that are picky about their investments. The focus is on companies that have strong unit economics and a path to profitability,” the report stated. Overall, Indian start-ups raised $24 billion between January and December last year across 1,021 rounds. The average size of the deals was around $23 million While late-stage funding has decreased, the report revealed that early-stage funding went up by 12 per cent. Infact, considering the data, early-stage funding has seen a steady rise over the years. Early-stage start-ups raised $1.3 billion, $2.5 billion, and $2.8 billion in CY20, CY21, and CY22 respectively. The average ticket size of the deals is around $4 million. The late-stage funding saw a sharp rise in CY21 standing at $12.6 billion which was more than three times the amount which was infused in CY20 ($3.6 billion). In CY22, this number plunged to reach $6.5 billion. The city wise trends revealed that majority of the funding came from metros such as Bangalore, National Capital Region and Mumbai. 25 start-ups from Bangalore such as BYJU’S, Swiggy, Dunzo, Udaan, Dailyhunt and others raised more than $100 million. 15 companies from NCR including Lenskart, Delhivery, Moglix, Pine Labs, and more also raised more than $100 million in CY22. In Mumbai, the top-funded start-ups include Fractal, upGrad, Clevertap, Turtlemint, CoinDCX, and more. Despite the funding winter, fintech and software as a service (SaaS) sectors seemed the most unperturbed as they remained well-funded. Interestingly, more than 50 per cent of the SaaS start-ups are headquartered in Chennai and Pune and not the major metro cities.