Private Equity-Venture Capital (PE-VC) funds invested $6 Billion (across 139 deals) in India-based companies during the quarter ended September 2023 (Q3'23), shows data from Venture Intelligence, a research service focused on private company financials, transactions, and their valuations. This represents a 15% decline compared to the same period in 2022 (which saw $7 Billion being invested across 327 deals). The investment amount also dipped 49% compared to the immediate previous quarter (which saw $11.7 Billion being invested across 202 deals).
The PE-VC investment figures for the first 9 months of 2023 - at $23.6 Billion (across 542 deals) came in 38% lower compared to the same period in 2022 (which saw $38.1 Billion being invested across 1,141 deals).
Q3’23 witnessed 16 mega deals ($100 M+ rounds) worth $4.5 Billion, compared to 13 such investments (worth $3.8 Billion) in Q3’22 and 22 such deals (worth $9.7 Billion) in the immediate previous quarter.
The $1 Billion investment by Qatar Investment Authority in Reliance Retail Ventures accounted for 17% of the overall PE-VC investment pie in Q3'23. The buyout of fertility clinic chain Indira IVF by Baring Asia for $700 million and The Carlyle Group's $500 million investment in engineering services BPO firm Quest Global were the other top PE-VC deals of Q3'23.
These were followed by two investments by global PE investor KKR: a $275 million investment in logistics tech startup Leap India and a $250 million investment in Reliance Retail Ventures.
Re-entry of Unicorns
Q3’23 recorded the minting of one new Unicorn - in the form of quick commerce startup Zepto - ending the drought of the previous 11 months in the creation of private companies valued at $1 Billion and above. Overall, Unicorn Startups in India attracted attracted close to $400 million in Q3'23, - down by 16% compared to the same period last year (which saw $500 million being invested in Unicorn Startups) and down by 44% when compared to previous quarter (which saw $700 million being invested in unicorn startups).
IT & ITeS companies accounted for $1.8 Billion of the total investment pie in Q3'23, lower by 12% when compared with Q3'22 (which saw $2 Billion being invested). Tech industry investments were led by the $500 million investment in Quest Global by Carlyle and the $229 million raised by B2B SaaS fintech startup Perfios Software (from Kedaara Capital and existing investor Bessemer). These were followed by quick commerce firm Zepto's $200 million fund raise (led by StepStone Group).
The Healthcare industry attracted about $1.3 Billion in Q3'23 led by the $732 million acquisition of a majority stake in Indira IVF by Baring Asia, followed by India Resurgence Fund's acquisition of IndSwift Laboratories active pharmaceutical ingredients (API) and contract research and manufacturing services (CRAMS) businesses for $200 million
The two mega investments in Reliance Retail Ventures - totaling $1.25 Billion from KKR and Qatar Investment Authority - propelled the Retail industry to the third slot in Q3'23.
"While there is clearly no returning to the lofty heights of 2021 any time soon, recent weeks have seen global investors like KKR and India-focused firms like Westbridge Capital, MEMG Family Office, IIFL AMC and India Resurgence Fund stepping up their investment activity, With continued strength in the public markets (including IPOs) and the large amounts of "dry powder" available with India-dedicated funds, a few more "confidence building" transactions will help catalyse the 'trickle down' effect into private markets and earlier stage companies," said Arun Natarajan, Founder, Venture Intelligence.
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 Q3'23 in the next few days.)