Venture capital (VC) equity firms have dry powder worth $590 billion globally, PricewaterhouseCooper (PwC) reported. A majority of this fund was to be invested in the calendar year (CY) 2021 and CY22. 

According to PwC, 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 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, it added.

The Indian start-ups raised $24 billion between January and December last year across 1,021 rounds. The average size of the deals is said to be around $23 million. Though the late-stage funding has decreased, early-stage funding went up by 12 per cent.

The report also suggests that early-stage start-ups have raised $1.3 billion, $2.5 billion, and $2.8 billion in CY20, CY21, and CY22. 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 that was infused in CY20 ($3.7 billion). In CY22, this number plunged to reach $6.5 billion. 

The city-wise trends revealed that the majority of the funding came from metros such as Bangalore, National Capital Region and Mumbai. 

The top five sectors that attracted funding were software as a service (SaaS), FinTech, Logi and AutoTech, EdTech and direct-to-consumer (D2C), contributing approximately 71 per cent of the total funding in CY22 in value terms. Funding in SaaS start-ups grew by 20 per cent in CY22 versus CY21, making it the most-funded sector of CY22.