Internet businesses in India haven’t been able to raise too much money in recent months, reports fe Bureau in New Delhi. Private equity and venture capital funds remain cautious and invested just $784 million in the three months to September, according to Jefferies Equity Research. That’s better than the mop-up in the June quarter when just $453 million flowed in but well below the peak of $2.6 billion seen in the September quarter last year. The number of deals larger than $5 million at 22, was the lowest in seven quarters.
Among the companies that managed to convince financiers to back them were messaging app Hike, which attracted $175 million from Foxconn, Tencent, SoftBank, Tiger and Bharti, valuing the company at over $1billion.
Yatra’s acquisition and reverse merger with Terrapin was another major deal during the quarter and and would lead to at least $100 million being infused into Yatra’s balance sheet. Meanwhile, should a $1 transaction materialise between Wal-Mart and Flipkart, as has been reported in the media, it would be the largest fund-raising this year by far.
The government in March allowed 100% foreign direct investment via the automatic route in e-commerce marketplaces, although it barred a platform from influencing the price of products directly or indirectly. Players such as Flipkart and Amazon that have vendors who supply more than 25% of the total sales, the government said, would need to alter their models.