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PE-VC investments in Q3'22 fall 71% to $6.3 Billion

Press Release

Private Equity-Venture Capital (PE-VC) firms invested $6.3 Billion (across 258 transactions) in Indian companies during the quarter ended September 2022 (Q3'22) - registering an 71% decline from the same period in 2021 (which saw $21.7 Billion being invested across 414 deals). The investment amount was also down about 52% compared to the immediate previous quarter (which saw $13.3 Billion being invested across 342 deals), shows 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).

The latest quarter, which marked four continuous quarters of decline in the investment value, takes the total PE-VC investments during 2022 to $36 Billion (across 1,016 deals) - down 26% compared to $45.4 Billion (across 949 deals) in the same period in 2021.

Mega Deals Decline

Q3'22 witnessed just 12 PE investments worth $100 million or more, compared to 50 such transactions in the same period last year and 33 mega deals  in the immediate previous quarter.

The largest investment in Q3’22 - accounting for 17% of the overall pie - was the $1.1 Billion investment in publicly listed Yes Bank by global PE investors Carlyle Group and Advent International. The other top investments during the quarter included US-headquartered KKR’s $450 million investment (along with the promoting Hero Group) into renewable energy firm Hero Future Energies and the $315 million acquisition of a majority stake in Sahyadri Hospitals by Canada-based Ontario Teachers Pension Plan (OTPP). This was followed by NIIF’s acquisition of SP Jammu Udhampur Highway from the Shapoorji Pallonji Group for $290 million and British International Investment’s $250 million investment into publicly listed Mahindra & Mahindra's EV unit.

Unicorn Activity

Q3'22 saw the minting of 3 new Unicorns - OneCard, Shiprocket and Molbio Diagnostics - compared to 13 in Q3'21 and 4 in the immediate previous quarter (Q2’22). Overall, Unicorn Startups in India attracted close to $633 million worth of investments in Q3'22, - down by 95% compared to the same period last year (which saw $12 Billion being invested in Unicorn Startups).  

By Industry

IT & ITeS companies accounted for $2 Billion of the total investment pie in Q3'22, lower by 85% when compared with Q3'21 (which saw $13.9 Billion being invested). This was led by the $225 million fundraise by education technology unicorn UpGrad (from Temasek, IFC, IIFL VC, Lupa Systems, and others) and the $166 million raised by eyewear retailer Lenskart (from Epiq Capital, Alpha Wave Global, Avendus PE, Temasek, and others). This was followed by the $105 million fundraise by customer lifecycle management and mobile marketing company CleverTap (from IIFL VC, CDPQ, Tiger Global, and Sequoia Capital India).

BFSI companies came in next, attracting $1.3 Billion in Q3’22, a 24% decrease compared to the $1.7 Billion in Q3’21. Yes Bank’s $1.1 Billion fundraise from Advent International and Carlyle topped the BFSI list, followed by ADIA’s $84 million investment in Aditya Birla Health Insurance.

Energy companies saw $913 million worth of investments in Q3’22 - a 36% increase compared to the $673 million in Q3'21. KKR and Hero Group invested $450 million in renewable energy firm Hero Future Energies. This was followed by a $117 million investment in Reliance Power by Varde Partners.

Healthcare & Life Sciences companies attracted $880 million (across 17 companies)  in Q3'22 - up 127% from the $387 million (across 17 companies) in Q3'21. The $315 million Sahyadri Hospitals-OTPP deal was followed by ASG Eye Hospitals' $187 million fund raise from Kedaara Capital and General Atlantic. Diagnostics related companies Molbio ($85 million from Temasek) and LifeWell ($80 million from OrbiMed) followed next.

"Given the global macro economic developments and continued volatility in the public markets, the decline in the private company investment figures, compared to the lofty highs of 2021, was to be expected ," said Arun Natarajan, Founder, Venture Intelligence. "What is heartening however is the fact that we are tracking to close the year with investment figures higher than any other year, excepting the now clearly anomalous 2021. Also, investors are now looking at a range of sectors rather than just the digital technology companies that dominated the last two years" 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 Q3'22 in the next few days.)

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