With Reliance Industries' communications unit Jio Platforms attracting 51% of the investment value, Private Equity-Venture Capital (PE-VC) investments in India rose 12% during the first 6 months of 2020 to $18.8 Billion (across 341 deals), shows data from Venture Intelligence, a research service focused on private company financials, transactions and their valuations. Investments totaling over $9.5 Billion in Jio by a troop of global private equity firms, following social media giant Facebook's $5.7 Billion mid April investment in the company, helped overall PE-VC investments better the $16.8 Billion (across 503 transactions) invested during the same period in 2019. (Note: These figures include Venture Capital investments, but exclude PE investments in Real Estate).
Jio Platforms' $9.5 Billion Private Equity haul (excluding Facebook’s strategic investment) was led by Middle Eastern and American investors with KKR, Saudi Arabia's Public Investment Fund and Vista Equity Partners which invested $1.5 billion each, followed by Silver Lake Partners and Mubadala Investment which invested over a $1 Billion each. H1'20 witnessed 24 PE-VC investments worth $100 million or more, down from 37 such transactions in the same period last year. But for the Jio investments, overall PE-VC investments during H1 2020 would have fallen 45% compared to H1 2019, the Venture Intelligence analysis shows.
At $4.1 Billion across 270 deals, Venture Capital* investments fell 11% in value terms (and 31% in volume) compared to the same period in 2019 (which had witnessed $4.6 Billion across 393 transactions). Notably, VC investments shrunk 52% (in value terms) year-on-year to just $1 Billion in Q2'20. (*Venture Capital is defined as investments in startups less than 10 years old.)
Led by Jio, Telecom accounted for $9.6 Billion of the investment pie in H1'20, with smartphone manufacturer Lava International chipping in with $90 million raised from Global Emerging Markets Group.
IT & ITeS companies came in next, attracting $3 Billion - down 43% compared to the $5.3 Billion they had attracted in H1'19. The first two months of the year saw existing investors SoftBank and Naspers leading mega rounds for their Unicorn portfolio companies, including budget hotel aggregator Oyo Rooms and food delivery company Swiggy, respectively. With such deals becoming an almost distant memory in Q2'20 thanks to Covid, the $150 million round attracted by API (Application Programming Interface) development and testing company Postman and the new investment in EdTech company Byjus from the Mary Meeker led Bond Capital (announced at th fag end of the Q2) provided some scope for optimism. Apart from Postman, the first half of 2020 saw the minting of one more Indian Unicorn startup: cosmetics e-tailer Nykaa (which attracted about $25 million from Steadview Capital and other investors)
"The Coronavirus-related lockdowns and \the overall economic uncertainty had caused a large section of the PE-VC investment community to go into a pause mode - something reflected in the shrinking deal volumes," noted Arun Natarajan, Founder, Venture Intelligence. "Until there is better clarity on the still unfolding health crisis, most investors are likely to focus their energies on existing portfolio companies and be very selective in making new investments," he added.
Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.
(Venture Intelligence Subscribers will be mailed detailed reports of the PE-VC action during Q2'20 in the next few days.)