Private Equity - Venture Capital (PE-VC) firms invested a record $63 Billion (across 1,202 deals) in Indian companies during 2021, registering a 57% rise over the $39.9 Billion (across 913 deals) invested in the previous year, reports Venture Intelligence, a research service focused on private company financials, transactions, and their valuations. (Note: These figures include Venture Capital type investments, but exclude PE investments in Real Estate).
India minted a total of 44 "Unicorn" companies (VC-funded startups valued at $1 Billion or more) in 2021, 15 of them during Q4'21. The $23.4 Billion invested into the Information Technology sector dominated list of Unicorns accounted for more than 37% of the overall value of PE-VC investments in 2021. The October-December 2021 quarter (Q4'21) saw over $5 Billion (across 25 deals) being invested in such companies.
2021 witnessed eight investments worth $1 Billion or more, led by Flipkart's $3.6 Billion Pre-IPO round (which marked the re-entry of SoftBank Corp to E-commerce giant's list of shareholders, following its exit to Walmart in 2018).
The next three largest PE investments - after Flipkart's mega fund raise - went to IT Services companies: Carlyle Group's acquisition of Baring Private Equity Asia's (BPEA) stake in Hexaware Technologies in a $3 Billion deal; the $2.8 Billion bid by Blackstone to buy out a 75% stake in publicly listed MphasiS; and Advent International's acquisition of Encora (from fellow US-headquartered PE firm Warburg Pincus) for $1.5 Billion. Edtech "decacorn" Byju's $1.4 Billion fundraise led by Prosus Ventures (formerly Naspers) was the fifth largest PE-VC investment during 2021.
VC* investments in 2021 - at $34.7 Billion across 1,070 deals - rose by over 200% compared to 2020 ($11.4 Billion across 795 deals). 2021 witnessed an 97 mega deals ($100M+ rounds) worth $24 Billion, compared to just 28 such investments worth $5.5 Billion in 2020. (For the purpose of this analysis, VC is defined as Seed to Series F investments in companies less than ten years old and late-stage tech investments).
E-Commerce was the favorite sector among investors in 2021, attracting $10.3 Billion, followed by Fintech which attracted $7.7 Billion.
Sequoia Capital India was the most active investor in 2021 crossing a century in terms of bets (105 transactions across 91 companies), followed by global investor Tiger Global (which was part of one out of every three $100M+ deals during the year) with 60 investments (across 47 companies).
Accounting for five of the eight Billion Dollar deals - led by the Flipkart investment and the string of mega-sized IT Services bets - IT & ITeS companies attracted $40.7 Billion during 2021. The tech industry witnessed 85 Mega deals ($100M+ investments) during 2021 totaling $31.8 Billion, of which 26 deals (aggregating to $9.8 Billion) were announced during Q4'21.
The BFSI (Banking, Financial Services & Insurance) industry attracted $4.7 Billion during 2021 - a 74% jump from the $2.7 Billion raised during previous year. Investments in the industry were led by the Blackstone's $1 Billion investments in ASK Group, followed by Ares SSG's $380 million acquisition of distressed realty financier Altico Capital, and SME-focused lender Ofbusiness' $325 million fund raise (led by Alpha Wave Global, SoftBank and Tiger Global).
The Healthcare & Life Sciences industry attracted about $3.2 Billion during 2021 - a 28% increase year on year. The Education industry came in fourth attracting $3 Billion, led by Byjus (which raised about $1.9 Billion during 2021) and followed by the higher education focused Eruditus' $650 million raise and Blackstone's acquisition of a controlling stake in Simplilearn for $250 million.
"While the mega-sized investments and the Unicorn rush hogged the headlines, a key highlight for the Indian PE-VC industry during 2021 was the successful IPOs of several investee companies - including Zomato, Nykaa and PolicyBazaar - on the domestic bourses," noted Arun Natarajan, Founder of Venture Intelligence. "The IPOs, along with a string of successful Liquidity Events via Secondary deals and Strategic M&A - led by the $2.2 Billion exit from payments firm BillDesk - will help establish the Indian PE-VC asset class on a firm footing on the global stage," 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 2021 in the next few days.)