Private equity and venture capital investments in India have created a powerful comeback throughout the 1st quarter of 2021 vis-à-vis the year-ago period and the preceding quarter (Q4 2020). Led by Zomato, Byju’s, Dream11, and NBFCs such as Dewan Housing Finance and Altico Capital, the quarter witnessed $11.85 billion poured, up about 85 per cent from $6.54 billion in Q1 2020, according to the information from Venture Intelligence. However, the deal volume or the quantity of offers contracted by 21 per cent to 199 from 244 throughout the stated period. Similarly, the deal worth was larger 58 per cent in Q1 2021 from $7.7 billion in Q4 2020 whilst deal volume was down 19 per cent from 237 in the prior quarter.
The investors’ appetite to back higher scale technologies startups gained momentum in Q1 2021 on the back of $400 million and above rounds of investments attracted by Zomato, Byju’s, and Dream11. While Zomato had raised $500 million, Byju’s and Dream11 secured $460 million and $400 million respectively, according to the information. Moreover, 18 private equity investments throughout the quarter had been worth $one hundred million or more in comparison to 14 such offers throughout the year-ago period.
“The global liquidity is the big reason for strong deal flow. Moreover, this whole SPAC phenomenon is also a function of this liquidity and it is all coming mainly from the US. As long as that continues, the deal flow would be strong. If something negative happens in the US and because of that private market gets affected as well, that will come very quickly to India because unlike earlier, there is no counterbalance to Chinese investors. So, if the US sneezes, we will catch a cold,” Arun Natarajan, Founder, Venture Intelligence told TheSpuzz Online.
Also study: India’s gig economy comprising Zomato, Swiggy, Ola, Dunzo, other people may possibly serve 90m jobs, add 1.25% to GDP
Top investments throughout Q1 2021 incorporated two distressed asset offers in the monetary sector, 1st, $5.2 billion buyout of the Dewan Housing Finance or DHFL by Piramal Enterprises, and second, the $380 million buyout of realty focused Altico Capital by Hong Kong-based Ares SSG. The top rated sectors in terms of investments attracted throughout the quarter had been BFSI with more than $6 billion, IT & ITeS with $4 billion, $486 billion in education, $390 billion in healthcare and life sciences, and $348 billion in shipping and logistics. Further, there had been eight domestic IPOs of PE-VC backed firms which includes Nazara Technologies, Craftsman Automation, Indigo Paints, and so forth., along with the merger of Goldman Sachs Group-backed Renew Power with a Nasdaq-listed Special Purpose Acquisition Company (SPAC) RMG Acquisition Corporation II (RMG II) kept exit activity alive throughout the quarter.