Startup funding: The private equity deal activity in July was dominated by startups with 29 deals involving $133 million, accounting for 44 per cent of total PE volumes, according to the latest Grant Thornton Bharat Dealtracker reporting PE and M&A deals for the month. Importantly, PE deals saw a modest decline with 66 deals at $1.1 billion, marking the second-lowest monthly volumes and values since August 2020.
In the startup sector, the retail segment dominated the deal activity, followed by edtech, fintech and enterprise segments, collectively contributing to 55 per cent of the startup sector’s volumes.
Notably, July continued to observe a significant presence of B2B startups which accounted for more than 52 per cent of deals. The average PE deal size stood at $16.5 million compared to $12 million in July 2022.
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Overall, 95 PE and M&A deals were recorded during the month amounting to $3.1 billion. While deal volume saw a 46 per cent decrease in comparison to the same period in 2022, the market surged with a 58 per cent jump in deal value. The catalyst for this growth was the emergence of nine big-ticket transactions valued over $100 million, aggregating an impressive $2.1 billion, the report noted.
Shanthi Vijetha, Partner, Growth, Grant Thornton Bharat said the impact of the global economic slowdown is also being felt in the deal activity in India as it has been subdued since the beginning of the year compared to 2022.
“While the cross-border transactions propelled the surge in total deal values, carefulness in private equity investment caused a reduction in overall volumes. However, India’s attractiveness as a destination for deal-making and investments is expected to persist and H2 2023 to witness improvement in deal activity, despite the global macroeconomic conditions,” she said.
In terms of M&A deals, the volume, led by startups, recorded a 17 per cent decline even as there was a staggering 7x increase in values in July this year in contrast to July 2022. This surge was anchored by 29 deals valued at $2 billion, where six high-value transactions encompassing traditional sectors like IT, auto, retail, and manufacturing took centre stage.
10 startup M&A deals involving $244 million were reported in July. The retail segment in startups led the volume accounting for 40 per cent of the deals, valued at $58 million. The data analytics, big data & AI segment took the lead in terms of values, contributing to 41 per cent of startup sector’s total values.
July also saw India’s first unicorn startup of the year, Zyber 365 Technologies, securing $100 million in Series A funding at a valuation of USD 1.2 billion, becoming the fastest unicorn in both India and Asia, the report added.