‘India’s VC market ends 2019 on a high note securing mega deals’

Our Bureau Mumbai | Updated on January 29, 2020 Published on January 29, 2020

Venture capital market in India was “quite strong” in the fourth quarter of 2019, ending the year on a high note with many large mega deals, according to a study by KPMG.

The mega-deals included a $1-billion funding round by PayTM and a $500-million round by business productivity company Udaan. Online pharmacy company PharmEasy raised $220 million, while home furnishings company Urban Ladder raised $148 million.

Consumer technologies were the focus for VC investors in India, while fintech continued to be one of the strongest sectors of VC investment in Q4’19. This trend is expected to continue given the country’s significant rural and unbanked population and the complexities associated with building a traditional financial services company in the country, it added.

Foreign investors remained active in making investments in India. During Q4’19, Silicon Valley-based Accel closed a $550-million fund, its sixth India-focussed VC fund.

India has also seen an increase in VC investments by Japan’s trading houses.

“VC investment in India was relatively mixed during 2019. While VC investment started soft, the last two quarters have seen a number of excellent deals. This activity suggests a growing positivity heading into Q1’20. Further, of late, there is a growing interest in the space from Japan’s trading houses, who are betting on the India consumption story,” said Nitish Poddar, Partner and National Leader–Private Equity, KPMG in India.

Heading into 2020, companies in India are looking to attract attention from VC investors are expected to put more emphasis on reducing their cash flow and providing clear paths to profitability. Logistics, education and e-commerce are all expected to remain hot areas of growth, it added.

Investment steady globally

Globally, VC investment remained steady in Q4’19 despite several market challenges that ranged from trade tensions between the US and China, the uncertainty leading up to the December general elections in Britain, and the continued weakness of China’s economy.

While significantly lower than the record-setting level of VC investment seen in 2018, total annual VC investment globally remained higher than every other year on record.

Published on January 29, 2020
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