Global Startup Funding Drops After Russia Invades Ukraine

Following the attack on Ukraine by Russia, venture capital investment on startups has dramatically declined in many parts of the world.

In a report by startup and venture capital database platform, Crunchbase, following the attack, last Thursday, 24th February, only 154 companies across the globe have revealed seed (early or late-stage) funding from the venture capital market or Angel Investors.

Crunchbase also revealed that the total amount of funds raised globally since Russia invaded Ukraine is  $3.65 billion. This is a sharp decline to an average of $912 million invested across 39 rounds per weekday – this is excluding fundraised during weekends as the majority of the announcement from startups comes during the week.

In Africa alone, the amount of money raised by startups towards the end of January stood at $400 million with 44 startups and 34 deals. This figure positioned the continent for a promising 2022 for African startups and founders. However, with the ongoing Russia-Ukraine crisis, the future of startups in Africa and globally seems a bit unsure.

Although the data from Crunchbase aren’t so little, they are, however, diminutive when compared to previous figures. The data also revealed that in the first 23 days in February, companies globally announced $30.68 billion in seed funding, which averages to over $1.9 billion per weekday—more than double after the attack.

Funding round counts have also reduced since the attack. Before the attack, there were 1,284 disclosed rounds summing up to an average of 80 per weekday, more than double the average for the past four weekdays.

This data however doesn’t mean that startups are not raising funds or the venture capital market and Angel Investors are no longer interested in funding startups. Of course, to a point, it is expected that due to the pressing nature of the issue between Russia and Ukraine, certain updates may be halted in the venture capital space.

It is also important to note that while funding may have reduced, some platforms in the venture capital and tech space have reacted to the ongoing crisis between Russia and Ukraine. A number of companies have aided Ukraine in providing support both financially and by serving sanctions to Russia. Binance is one notable company that provided massive support to Ukraine when Russia invaded and attacked.