PE-VC investments in Q2’23 decline 33% to $9.9 b: Venture Intelligence data

Private Equity-Venture Capital (PE-VC) investments in India during the quarter ended June 2023 (Q2’23), at $9.85 billion across 182 deals, a 33 per cent decrease when compared with the same period in 2022 (which saw $14.6 billion being invested across 371 deals).

The investment amount, however, rose 7 per cent when compared with the immediate previous quarter (which saw $5.7 billion being invested across 181 deals), shows data from the Chennai-based Venture Intelligence, a research service focused on private company financials, transactions and their valuations.

The PE-VC investment figures for the first six months of 2023 — at $15.5 billion (across 363 deals) — was 50 per cent lower compared with the same period in 2022 (which saw $31 billion being invested across 800 deals).

Mega deals

Q2’23 witnessed 19 mega deals ($100 M+ rounds) worth $8 billion, compared with 37 such investments (worth $10.3 billion) in Q2’22 and 17 such deals (worth $3.6 billion) in the immediate previous quarter.

The $2 billion investment by the Singapore government-owned Temasek Holdings in Manipal Hospitals accounted for 20 per cent of the overall PE-VC investment pie in Q2’23. The acquisition of Mumbai-based education loans provider HDFC Credila by Baring Asia and ChrysCapital for $1.1 billion and Canadian investment firm Brookfield’s $1 billion investment in energy platform Avaada Ventures were the other top PE-VC deals of Q2’23. These were followed by a $630 million investment in Cube Highways Trust and a $450 million investment in travel and logistics SaaS company IBS Software, according to Venture Intelligence data.

IT & ITeS companies accounted for $2.2 billion of the total investment pie in Q2’23, lower by 70 per cent when compared with Q2’22 (which saw $7.3 billion being invested). Tech industry investments were led by the $450 million investment in IBS Software by Apax Partners and the $250 million raised by mobile app building platform Builder.ai (from M12, Qatar Investment Authority, Iconiq Capital, Jungle Ventures, and Insight Venture Partners). This was followed by a $150 million fundraise by construction materials marketplace Infra.Market from Varde Partners.

Healthcare industry

The healthcare industry attracted about $2.1 billion in Q2’23 — a 123 per cent spike compared with the $957 million in Q2’22. The $2 billion investment in Manipal Hospitals topped the Healthcare list, followed by Somerset Indus Capital Partners’s $18 million investment in Emil Pharma.

The energy industry saw $1.9 billion worth of investments in Q2’23, up by 28 per cent compared with the $1.5 billion invested in Q2’22. Top deals include Brookfield’s two investments in renewable energy companies: $1 billion in Avaada Ventures and the $360 million buyout of Clean Max Enviro Energy Solutions.

Clearly, PE investors have far more confidence in investing behind basic sectors like healthcare, infrastructure, manufacturing and financial services at this point,” said Arun Natarajan, Founder, Venture Intelligence.

From the perspective of internet & mobile companies, the new investments in Unicorns like Infra. Market and Lenskart and also the significant build of ‘Dry Powder’ (un-invested capital) with India-dedicated VC firms, provides scope for optimism that the funding winter will begin to thaw in the second half of the year, he added.

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