PE-VC investments increased to USD 5.2 billion in August as large deals shoot up

Venture capital and private equity funds' investments increased to USD 5.2 billion across 67 deals in August, a report said on Wednesday.

The investments are more than double of the USD 2.3 billion witnessed in August 2022, even though the number of transactions has declined from 32 in the year-ago period, as per the monthly report by industry lobby grouping Indian Private Equity and Venture Capital Association (IVCA) and consultancy firm EY.

The consultancy firm's partner Vivek Soni said funds are skeptical as growth remains elusive for many startups and valuations remain high.

"With many sovereign wealth funds, especially from the Gulf nations, setting up shop in India and also increasing their exposure to Indian startups, the medium to long-term outlook remains positive for the Indian startup sector despite the current short-term issues of tepid growth and governance troubles at some startups," he said.

There were 13 large deals of more than USD 100 million each, aggregating to USD 4.5 billion in August, which is a 416 per cent jump from the same in the year-ago period.

Fourteen deals involving investments of USD 2.4 billion were classified as growth investments as compared to just USD 176 million in nine deals in August 2022.

Startup investments declined by 62 per cent to USD 387 million across 27 deals in August 2023 as compared to USD 1 billion across 63 deals in August 2022, the report said.

Infrastructure emerged as the top sector in August 2023, on the back of the large investment by GQG Partners Inc in Adani Power Limited, recording USD 1.8 billion in PE/VC investments across six deals. It was followed by retail and consumer products sector, which saw USD 1 billion in four deals.

August 2023 recorded 37 exits worth USD 4.3 billion, the highest value of exits in 22 months, compared to USD 3.2 billion recorded in August 2022 across 28 deals.
PE/VC funds raised USD 1.5 billion compared to USD 583 million in August 2022, as per the report.

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