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India bucked the global venture capital (VC) investment trend that took a major hit in the first quarter of 2019, according to a report by KPMG.
In the report titled ‘KPMG Enterprise Venture Pulse report’, the advisory firm said while venture capital investment dropped across major markets in Q1 2019, India saw some solid VC activity as automotive services companies gained ground.
During the quarter, Indian start-ups raised several ‘$100 million plus’ deals, with logistics start-up Delhivery raising about $413 million and ride-hailing platform Ola raising $300 million.
According to the report, overall venture capital (VC) investment dropped from record highs of $71 billion in Q4’18 to $53 billion in Q1’19, due to a decline in Chinese investment, among other factors.
While US and European investment remained relatively robust quarter over quarter, Chinese VC fell from $10.1 billion in Q4’18 to $5.8 billion in Q1’19, as mega-deals took a pause, according to the Q1’19, the report added.
Globally, VC deal volume declined for the fourth consecutive quarter with only 2,657 deals – representing the lowest number in 31 quarters – since Q2 2011. The continued decline in deal volume was felt in every region, but was particularly pronounced in Europe that saw deal volume drop from 882 deals in Q4’18 to 487 deals in Q1’19.
Meanwhile In India, though the market did not see any $1 billion+ rounds this quarter, the country attracted several $100 million+ deals, even as automobile marketplace platforms continued to receive attention, a trend expected to continue for the next several quarters
Nitish Poddar, Partner and National Leader - Private Equity, KPMG in India said, “Edtech has the potential to become a truly breakout sector in India. The sector has evolved from companies simply offering online digital classes, to providing access to both online and offline tutorial offerings, to now offering even more innovative options. With no clear leader in the space, many companies are competing to develop content and raise funding rounds. It is anyone’s game – which will make the next few quarters very critical.”
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