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. according to early data from 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).
While the investment amount represents a 72% rise over the $8.8 Billion (across 257 deals) invested in the same period during 2021, the figure is down 20% compared to the immediate previous quarter which witnessed $18.9 Billion being invested (across 344 deals). Deal volumes in Q1'22 - which showed a 35% growth compared to Q1'21 - stayed flat compared to the immediate previous quarter.
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 Q1'22. 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 Q1'22, with 14 new "Unicorn" companies (VC-funded startups valued at $1 Billion or more) being minted in the period.
IT & ITeS companies continued to remain the favorite destination for investors attracting $8.3 Billion across 256 deals (a 93% growth from the $4.3 Billion across 163 deals in Q1'21). Deals in the tech industry were led by the 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 Q1 2022 - a 46% increase from the $824 million invested across 13 deals in Q1'21. 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.
"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 PE-VC investors - who have already raised significant capital for their newer funds - focus on newer sectors and catalyze consolidation in some of the tech sectors," 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 Q1 2022 in the next few days.)