Private equity, venture capital firms eye funds crunch as mop-up drops 9% to $5.07 bn in 2016

By: | Published: March 6, 2017 5:47 AM

Private equity (PE) and venture capital (VC) firms aren’t able to attract investments as easily as they may have liked, reports Anushree Bhattacharyya in New Delhi.

Resurgent Power Ventures (RPV) —set up to invest in power projects by the ICICI Group and Tata Group — managed to raise 3 million. (Reuters)

Private equity (PE) and venture capital (VC) firms aren’t able to attract investments as easily as they may have liked, reports Anushree Bhattacharyya in New Delhi. In 2016, 42 India-focussed funds together mopped up $5.07 billion, about 9% lower than the amount raised in 2015, data from News Corp VCCEdge shows.

VC firms such as Sequoia Capital India, which raised a fairly large amount of $920 million in 2016, invested in two dozen start-ups, including Urban ladder, Voonik, Practo, ZoomCar. In the previous year, Sequoia had invested in more than 40 start-ups.

Resurgent Power Ventures (RPV) —set up to invest in power projects by the ICICI Group and Tata Group — managed to raise $843 million; it had targeted an $850-million corpus. Caisse de depot et placement du Quebec (CDPQ) of Canada, Kuwait Investment Authority and State General Reserve Fund of Oman are the other investors in the fund.

Multiples Private Equity Fund II LLP too raised more than it had targetted — picking up $685 million but India Advantage Fund Series IV picked up $350 million, short of its original target of $500 million.

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Consulting firm KPMG notes that VC firms are taking more time to evaluate start-ups as they look for scalable and profitable business models. Funds are becoming choosy, the firm said in a recent report adding that IT companies, technology-oriented start-ups and fintechs walked away with a large portion of both PE and VC money.

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