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Private Equity-Venture Capital (PE-VC) firms invested over $15.1 billion across 346 deals in Indian companies during the first three months of 2022. This represents a 72 per cent rise over the $8.8 billion (257 deals) invested in the same period in 2021. However, the figure is down 20 per cent when compared to the immediate previous quarter, which witnessed $18.9 billion being invested in 344 deals.
Deal volumes in the March quarter, which showed a 35 per cent growth when compared to the corresponding quarter of last year, stayed flat compared to the immediate previous quarter, according to a report by the Chennai-based Venture Intelligence, a research service focused on private company financials, transactions, and their valuations.
Qatar Investment Authority's $1.5-billion investment in the new media and consumer technology-focused platform Bodhi Tree (co-created by media veteran Uday Shankar and James Murdoch's Lupa Systems), was the largest in the March quarter. This deal was followed by the $700-million investment in food delivery platform Swiggy, led by Invesco, making it a "decacorn" (valued at more than $10 billion).
The momentum for technology sector investments spilled over into the March quarter, with 14 new ‘Unicorn’ companies (VC-funded start-ups valued at $1 billion or more) being minted in the period, the report said.
Investment destination by industry
IT & ITeS companies remained the favourite destination for investors, attracting $8.3 billion across 256 deals (a 93 per cent growth from the $4.3 billion across 163 deals in the March 2021 quarter). Deals in the technology industry were led by mega investments in Swiggy and other unicorns, including the blockchain-focused Polygon ($450 million), enterprise voice tech focused Uniphore Software ($400 million), and analytics firm Fractal ($360 million).
The Media & Entertainment industry came in next, led by the mega investment in Bodhi Tree, followed by a $95-million investment, led by Accel India, in newly minted unicorn Amagi Media Labs.
The BFSI industry attracted about $1.2 billion across 12 deals during the March 2022 quarter - a 46 per cent increase from the $824 million invested across 13 deals in the same quarter last year. The $486-million investment in publicly listed IIFL Wealth Management by Bain Capital topped the BFSI list, followed by the Apollo Global Management-led $267 million investment in Hero Fincorp and the $200-million investment in Oxyzo Financial Services, the report said.
"With the steep decline in technology stock prices in the US as well that of newly IPO-ed Unicorns in the Indian public markets, private market investors are likely to be much more selective in funding late stage tech startups as compared to 2021," noted Arun Natarajan, Founder, Venture Intelligence. "As the pandemic induced headwinds as well as tailwinds recede, we are likely to witness more consolidation across sectors, with PE-VC investors playing a catalytic role," he added.
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