In 2023, the value of PE-VC investments in Indian companies fell by 37.7% YoY to less than $30 billion. The number of deals also dropped by 80.2% YoY. The decline in investment amount and deal volume raises concerns among entrepreneurs and investors. In 2023, there were 67 mega deals, each exceeding $100 million, amounting to a total of $21.2 billion. The top five industries that received the most PE-VC funding in 2023 were IT & ITES, Healthcare & Life Sciences, Energy, BFSI, and Manufacturing. However, venture capital inflows into Indian companies have notably dwindled in 2022. In that year, the PE-VC investments declined 27.3% YoY in value and 6.5% YoY in deal volume.
Key points:
- In 2023, PE-VC investments in Indian companies fell by 37.7% YoY in value and 80.2% YoY in deal volume.
- In 2023, there were 67 mega deals, each exceeding $100 million, amounting to a total of $21.2 billion.
- The top five industries that received the most PE-VC funding in 2023 were IT & ITES, Healthcare & Life Sciences, Energy, BFSI, and Manufacturing.
- Venture capital inflows into Indian companies have dwindled in 2022, declining 27.3% YoY in value and 6.5% YoY in deal volume.
India has been experiencing a notable downturn in Private Equity – Venture Capital (PE-VC) investments in the last couple of years. According to a recent report by Venture Intelligence, the value of PE-VC investments in Indian companies plunged 37.7% YoY to less than $30 billion in 2023. At the same time, the number of deals dropped by 80.2% YoY. These PE VC firms invested $29.66 billion in Indian companies across 756 deals in 2023, a stark contrast to the $47.63 billion spread across 1,362 deals the previous year in 2022. It’s noteworthy that 2021 marked a pinnacle for India’s investment landscape. Both private equity and venture capital investments in Indian companies have reached an all-time high, breaking all previous years’ records.
In that year, PE-VC firms invested a record $65.48 billion into Indian enterprises, spanning 1,456 deals. This was a whopping 69.4% YoY increase in investment value and a 51.5% YoY increase in deal volume. However, venture capital inflows into Indian companies have notably dwindled in 2022. During the year, the PE VC investments declined 27.3% YoY in value and 6.5% YoY in deal volume. This shift was primarily attributed to a loss of investor confidence in various companies opting for restructuring measures. These measures included substantial workforce reductions, the shutdown of business segments due to pandemic-induced losses, and a strategic focus on expense reduction as companies positioned themselves for profitability ahead of impending IPOs, among other factors.
The decline in investment amount and deal volume in Indian companies, coupled with the dwindling number of new unicorns, raises concerns among entrepreneurs and investors. To revive investor confidence, established companies and emerging startups must prove their resilience, address concerns around governance and profitability, and adapt to the evolving economic realities.
