PE-VC investments dip 20% Q-o-Q

Chennai: Private Equity – Venture Capital (PE-VC) investments took a pause in January-March 2022 period, dipping on a sequential basis compared to October-December 2021 quarter.
PE-VC firms invested over $15.1 billion (across 346 deals) in Indian companies during the first three months of 2022, as per data from research firm Venture Intelligence. This represents a 72% rise over the $8.8 billion (across 257 deals) invested in the same period during 2021, but is down 20% compared to the immediate previous quarter which clocked investments worth $18.9 billion across 344 deals.
The steep corrections in the prices of tech stocks in the US and the performance of the Indian consumer tech ventures that went public recently is likely to make private investors more selective in funding late-stage tech startups in 2022, as compared to 2021, analysts said.
“There is a realignment happening in terms of sectors of choice and the stages of investments,” Arun Natarajan, founder and MD, Venture Intelligence, said. “While we are likely to see a pause in the late stage tech funding by global PEs and VCs, there is no dearth of dry powder. In the coming quarter, we will likely see more deal count but less value in terms of total PE-VC investment,” he said.
Qatar Investment Authority’s $1.5 billion bet on 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 the quarter. This deal was followed by the $700 million investment in food delivery platform Swiggy led by Invesco, making it a ‘decacorn’ (companies valued at more than $10 billion). Other top deals included blockchain firm Polygon’s $450 million fundraise, enterprise voice tech focused Uniphore Software raising $400 million, and analytics firm Fractal raising $360 million. Despite the pause, the quarter still saw 14 new unicorns being minted in the period.
Any impact of geopolitical issues in case of the Russia-Ukraine crisis will likely be felt only in the investment tally of April and beyond, analysts said, as announcements of private market deals are typically made at a lag of one month.