Venture Capital

Value of VC Deal in India Grew 5 times in the Last 10 Yrs; $10 Bn Since 2014

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The venture capital (VC) market in India is consistently ramping up particularly after Flipkart acquisition by Walmart in May this year. The powdered money investors have got post exiting the homegrown e-commerce giant is now being utilized for investing in new and mid-stage ventures.

Industry body, Indian Venture Capital and Private Equity Association (IVCA), has just released a report and it also reveals that VC industry has matured and the focus has shifted to placing selective bets on fewer investments.

The report, prepared by IVCA and Bain & Company says, “Bigger VCs have accordingly shifted their focus to later-stage investments with many new smaller VCs playing in the Seed/Series A stage,” it said.

Venture capital deal value grew 5 times in the last 10 years, with 2017 deal value at $3.4 billion. Overall since 2014, the figure has been pegged at $10 billion, said the report

The exit momentum has also picked up in the last few years with $4 billion worth of exits in 2017. “Going forward, exits are expected to increase in future with 80 per cent of start-up founders expecting investor exits by 2024”.

On the start-up ecosystem in the country, the report says India has been recording rapid growth with a number of total start-ups and funded start-ups growing at 30% CAGR.

“Multiple factors have contributed in building this flourishing start-up ecosystem in India. These include access to abundant, high-quality talent, strong underlying macroeconomic growth, holistic ecosystem enablers (like co-working spaces) and a supportive regulatory framework,” the report said.

According to a report released two months back by Ernst and Young (EY), private equity/venture capital (PE/VC) investments in Indian startup ecosystem have reached a whopping $8.7 billion in the September quarter, a figure which is significantly higher than what was recorded for the same period last year. The PE/VC investments for the quarter July-September’18 increased from $3.1 billion in the same period last year to a record high $8.7 billion this year. The report highlighted that this sharp increase was largely courtesy the big-ticket transactions that took place over the said period.

Source – Business Standard

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