Despite the Indian startups facing the funding winter, 128 of them raised $995.1 million in August 2022, which is a 9.7% growth compared to the previous month, analytics company GlobalData's data shows.

Moreover, the growth has come at a time when fundraising in other key global markets such as the US and UK witnessed a decline. China and India were the two notable exceptions to this trend in terms of rising startup funding in August.

India saw the announcement of 1,239 V-C funding deals from January to August 2022, while the corresponding disclosed funding value stood at $17.7 billion.

Aurojyoti Bose, the lead analyst at GlobalData, says although the total VC funding amount remains below $1 billion akin to July, August managed to reverse the decline in fundraising, despite a 2.3% fall in deal volume. 

“Despite the economic volatility, Indian startups fractionally managed to gain investors’ confidence. As the cyclical phenomenon of the funding winter suggests, India witnessed a slight month-on-month improvement in VC fundraising in August,” says Bose.

However, India's funding winter -- a downturn in investors' confidence in startups -- is expected to continue for the next 12-18 months. Market intelligence platform Tracxn says continued learning, alternative lending, e-commerce enablers, and investment tech are the top sectors that received the most funding from investors in August 2022. Of all big cities, Bengaluru tops the chart with the maximum fundraising, followed by Mumbai and Delhi.

Some of the notable fundraisings in August were by UpGrad ($210 million), EarlySalary ($110 million), and Razorpay's acquisition of Ezetap ($200 million). Investors like Beenext, LetsVenture, Accel, and Blume Ventures topped the investment charts last month.

Notably, a protracted Russia-Ukraine war has disrupted global supply chains, resulting in a shortage of commodities and a consequent price rise. 

With inflation rearing its ugly head, global central banks have raised interest rates, shoring up the cost of capital. As Indian startups rely heavily on external funding, they are bearing the brunt. Many big ones like Unacademy, Byju's, Vedantu and CARS24 have even laid off employees. 

As funding winter looms, over 12,000 Indian startup employees have reportedly lost their jobs. The global tally of such employees stands at over 22,000. 

The availability of easy capital and the rise in digital adoption had triggered a massive influx of investor funding into Indian startups over the last couple of years with companies often raising funds at what analysts describe as "unrealistic" valuations. 

The government data shows the number of recognised startups in the country increased from 471 in 2016 to 72,993 in 2022, a massive 15,400% rise. However, the sector, of late, is facing rough days amid global supply chain disruptions, causing a fund crunch as Indian startups rely heavily on external funding.

Follow us on Facebook, Twitter, YouTube & Instagram to never miss an update from Fortune India. To buy a copy, visit Amazon.