India PE, VC investments, exit deals at an all-time high for 2021: report

New Delhi: Investment and exit deals hit an all-time high of $77 billion and $43.2 billion in 2021, respectively, an IVCA-EY report said on Tuesday.

These investments came across 1,266 deals including 164 large deals worth $58 billion. Exits worth $43.2 billion were made through 280 deals, the monthly PE-VC roundup report said.

“The aggressive pace of deal making helped drive investment activity across all deal types, sizes and sectors. For the year 2021 PE-VC investments were 62% higher than 2020 (154% higher than 2020, excluding the one-off RIL deals), principally propped up by pure-play PE-VC investments that increased by 79% y-o-y (200% over 2020, excluding RIL deals),” Vivek Soni, partner and national leader private equity services, EY said.

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“While we had projected 2022 to be a record-breaking year for both investments as well as exits; pretty early on, the velocity and size of this record setting deal activity kept picking up pace, especially in the second half of 2021,” he added.

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The report said investments in startups was the defining feature in 2021. India overtook the UK as the third-largest ecosystem for startups with the year minting as many as 44 unicorns, which are companies valued at $1 billion or more. While most sectors registered a bump up in investments, ecommerce and technology were the top categories each witnessing record levels of capital flows with $15 billion and $14.3 billion, being raised by them, respectively.

Flipkart and Byju’s were the highest valued unicorns in India with a valuation of over $15 billion each.

Exits via sale to strategics were the highest at $16.9 billion (93 deals) in 2021 as large, cash rich corporates as well as PE/VC backed category leaders/platforms used the pandemic induced opportunity to consolidate market share and acquire new capabilities.

Exits via secondary sales were second in line with $14.4 billion recorded across 56 deals.

From a sector point of view, the technology sector recorded the highest value of exits in 2021 ($17.4 billion across 39 deals versus $847 million across 10 deals in 2020).

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