Key Points:
- The value of investments by Private Equity – Venture Capital (PE-VC) firms in India fell by 38% to less than $30 billion in 2023 compared to $47.6 billion in the previous year.
- Only two unicorn companies (VC-funded startups valued at $1 billion or more) were created in 2023 compared to 21 in 2022.
The value of investments by Private Equity – Venture Capital (PE-VC) firms in India dropped by 38% to less than $30 billion in 2023, according to Venture Intelligence. PE-VC firms invested $29.7 billion across 756 deals in Indian companies in 2023, compared to $47.6 billion across 1,362 deals in the previous year. The decline in investments is attributed to a slowdown in growth and late-stage investing in the venture capital segment.
In 2023, there were only two unicorn companies created in India, compared to 21 in 2022. A unicorn company refers to a VC-funded startup valued at $1 billion or more. Zepto, a quick commerce startup that raised $231 million from foreign investors, and Incred Finance, a consumer and small business loans firm that attracted $60 million from domestic Family Offices and HNIs, were the only two companies that achieved unicorn status in 2023.
Large ticket PE investors focused their attention on sectors like healthcare, financial services, and infrastructure. The largest PE-VC investment in 2023 was the $2.4 billion investment in Manipal Hospitals by Temasek and TPG Capital, followed by the $1.35 billion buyout of education loans focused HDFC Credila by Baring Asia and ChrysCapital, and the $1 billion investment by Qatar Investment Authority in Reliance Retail.
Towards the end of the year, private markets received a dose of optimism due to strong public markets, which led to a few large growth stage tech investments. However, the overall slowdown in growth- and late-stage investing affected the venture capital segment as well.
