TLDR:
- The IT and ITES sector in India saw a big drop in private equity and venture capital investments in the first three months of 2024.
- Specialist solutions providers like iBus and companies with applied AI expertise like Kore.ai attracted investor interest.
The Indian IT and IT-enabled services sector experienced a significant decline in investments in the first quarter of 2024, according to data from Venture Intelligence. The sector saw a 40% drop in investments, with PE and VC firms investing $1.6 billion across 114 deals, down from $2.7 billion across 145 deals in the same period in 2023.
Key investments in the sector included a $200 million majority stake acquisition in iBus and a $150 million investment in Kore.ai. iBus offers services in technology and telecom for enterprise customers, while Kore.ai is an enterprise AI software company with expertise in various verticals. Overall, PE and VC firms invested more than $6.2 billion in Indian companies in the first quarter of 2024, marking an 8% decrease from the previous year.
The decline in investments in the IT and ITES sector reflects a broader trend in the Indian investment landscape, with overall deal volumes and investment amounts seeing a decrease compared to previous periods. Despite the challenges, companies with specialized solutions and strong AI expertise continue to attract investors, showcasing a shift in investor preferences towards niche offerings and technological innovation.
