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December 31, 2023
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Tamil Nadu’s PE-VC investments plunge 49.65% in 2023

Key Points:

  • PE-VC investments in Tamil Nadu have decreased by 49.65% in 2023 compared to the previous year.
  • Angel investments in the state have also declined, with fewer deals in 2023 compared to 2022.

According to Venture Intelligence, PE-VC companies invested $1,378 million through 61 deals in Tamil Nadu-based firms in 2023, a significant decrease from the $2,737 million invested through 75 deals in 2022. This decline in investments is not unique to Tamil Nadu, as the trend of low investments has been observed nationally since the second half of 2022.

However, despite the overall decline, there were some interesting developments in the state’s investment landscape in 2023. New large ticket PE players entered the market, and although big SaaS firms did not receive funding, a new set of IT firms secured investments.

One notable trend in 2023 was the increase in controlled transactions. For example, Westbridge Capital acquired a significant stake in Kovai Pazhamudir Nilayam, and BPEA EQT acquired a majority stake in digital engineering firm Indium Software.

The decline in PE-VC investments in Tamil Nadu could be attributed to various factors, including economic uncertainty, changes in investor preferences, and the impact of the COVID-19 pandemic. However, it is important to note that the state still remains an attractive destination for investments, particularly in the IT sector where new players are emerging and finding success.

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