PE/VC Investments Fell by 23% in the First Quarter to USD 27.5 Bn: Report However, investments were up 33% in value terms compared to July to December 2022, the report by industry lobby Indian Venture and Alternate Capital Association (IVCA) and consulting company EY said.
By Sujata Sangwan •
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In comparison to the same period in the previous year, investments by private equity and venture capital (PE/VC) funds into Indian firms fell by almost a fourth to USD 27.5 billion, a report said on Thursday. However, investments were up 33% in value terms compared to July to December 2022, the report by industry lobby Indian Venture and Alternate Capital Association (IVCA) and consulting company EY said.
Investments were USD 35.9 billion in the first half (H1) of 2022, but values dropped to USD 20.6 billion in the second half.
According to the data, there were 427 deals, down 16% from the previous period and 44% from the same time last year.
"Growth to late-stage funding i.e. Series B onwards has already been hit and may continue to stay subdued for a few quarters more as valuations had run ahead of themselves in 2021 and early-2022. However, startups which showcase signs of building a healthy sustainable business with improving margins and continue to tap into vast market opportunities should be able to raise funds even in the current market scenario," shared Ankur Mittal, Co-founder, Inflection Point Ventures.
"As investors, we strongly align with the investing philosophy famously quoted by Warren Buffet, 'Be greedy when others are fearful and be fearful when others are greedy'. We follow this principle by capitalizing on opportunities during times of uncertainty," he added.
Although there has been a decline in investments in startups, PE/VC investments as a whole are still trending positively, according to EY partner Vivek Soni.
As per the report, the PE/VC funds raised over USD 10.2 billion in H1, which is encouraging for future investment activities.
"Going forward, we plan to pursue big-ticket investments via the co-investment model, with a cumulative investment target of over USD 1.5 billion in the coming three to four years through Fund IV," said Renuka Ramnath, Founder, MD, and CEO of Multiples PE, as the company marked the first close of its fourth fund at USD 640 million in May.
The monthly report also said that investments decreased by 42% in June to USD 3.1 billion, which was a 9% decrease from May.
The report added that the largest transactions in June included the USD 1.1 billion buyout of HDFC Credila Financial Services by BPEA EQT and Chryscapital and the USD 297 million majority share purchase of Watertec India by Warburg Pincus.
During the month, there were 38 exits totaling USD 2.1 billion, as opposed to 18 deals worth USD 2 billion during the same time last year. The study also stated that PE/VC funds raised a total of USD 3.8 billion in the month.
