After four months of decline, the funds flow into startups increased slightly in September to $1.54 billion from the previous month’s $1.25 billion, according data sourced from Tracxn. Investors, however, said the marginal improvement should not be seen as a sustainable trend.

Most of the funds flow in September was to the late-stage companies, which were the most affected in the previous month. These firms raised about $871 million during the month against $621 million in August.

The early and seed-stage firms, however, showed little improvement. Early-stage firms received about $552 million in September, while seed-stage startups got just $77 million. While funding in early-stage was higher from last month’s $478 million, the same for seed-stage was lower from previous month’s $97 million.

In April, the month just before the slowdown set in, prominent, late-, early- and seed-stage firms got $4.21 billion, $1.1 billion and $185 million, respectively.

“The September data does not establish that things will move in the positive direction hereon as there’s going to be more volatility going forward. We should watch the trend for another quarter, if data continues to show improvement, we can say the positive trend is sustainable,” Ashish Kumar, co-founder and general partner, Fundamentum Partnership, said.

“There is, however, more keenness in accepting capital at a valuation more relevant for all parties in the ecosystem. It’s been about five months since valuations have been reset, lower by 20-30%, and people have realised there is no point in holding off, the correction is no more a short-term phenomena, it is now at least a medium-term phenomena, so founders and investors are more reconciled with that fact,” he added.

September saw Molbio, a Goa-based diagnostics firm, Yulu Bikes, the electric mobility-as-a-service provider, and Zopper, the insure tech platform, mop up big-ticket fundraises, bagging $85 million, $83 million and $75 million, respectively.

Private equity firm KKR and Hero’s $450-million investment in Hero Futures Energies was another large round. Gurugram-based offline-to-online commerce platform DotPe was next to follow after it raised $58 million. Barring Hero Future Energies, there was no $100-million round in September. There were about two such rounds in August and roughly seven in July.

“Venture capital firms have been sitting on a lot of dry powder (money that they have raised from limited partners) that needs to be deployed. This is a reason for improvement in funds flow in September,” Shashank Randev, co-founder, 100X.VC, said.

The number of deals fell to 128 from last month’s 151. Since the start of the current calendar year, there were over 200 funding rounds every month till May end.