Lack of big-ticket deals drive down PE/VC investments in January 2019

By: |
Published: February 24, 2019 6:51:19 PM

January 2019 saw a 49% decline in the total deal value compared to January 2018 and 43% fall vis-a-vis December 2018, EY said in a report.

wealth distribution in india, wealth distribution in india 2018, wealth distribution in india 2016, unequal wealth distribution in india, household wealth distribution in india, caste wise wealth distribution in india, richest state in india, income distribution in india, income distribution, income distribution in india 2018, income disparity, income disparity in indiaThere were only four deals over 0 million in January 2019 worth .1 billion.

Lack of over $1 billion private equity/venture capital (PE/VC) deals in January this year has led to a 49% decline in the total deal value compared to January 2018 and 43% fall vis-a-vis December 2018. The month saw deals worth $1.8 billion, said a report by professional services firm EY.

“This decline was mainly on account of the absence of a large US$1 billion-plus deal in January 2019, whereas both January 2018 and December 2018 had one large US$1 billion-plus deal each,” EY said.

“We believe this data is skewed on account of the absence of large deals in January 2019,” said Vivek Soni, Partner and National Leader – Private Equity Services, EY.

There were four deals over $100 million in January 2019 worth $1.1 billion. However, January 2018 had recorded five such deals worth $2.8 billion even as December 2018 saw six investments totalling $2.3 billion.

The biggest deal in January 2019 $397 million raised by kids and baby products’ online retailer First Cry from SoftBank. Other deals in $100+ million bracket included $230 million raised by data analytics startup Fractal Analytics from PE firm Apax Partners and AION Capital Partners acquisition of BPO company Interglobe Technologies for $230 million.

AION is a joint venture between Indian PE firm ICICI Venture and US-based alternative asset management firm Apollo Global Management.

However, there was a 65% increase in the number of deals on a year-on-year basis, the report said.

Investments in startups saw $343 million poured across 56 deals. This was 46% higher in terms of deal value and more than 46% up from deal volume perspective compared to January 2018.

In terms of top sectors, e-commerce received $607 million across 11 deals followed by $438 million across nine deals in technology.

Timid Exits

Similar to PE/VC funding, exits too were timid in January. The month churned out $360 million from 13 exits against $969 million from 29 exists in January 2018, largely due to lack of high-value exits.

TA Associates and Khazanah exit from Fractal Analytics via a secondary sale to Apax Partners for $200 million was the largest exit deal.

“Private investment in public equity (PIPE) and open market/IPO exits have declined materially on account of weakness/volatility in the capital markets, which we think is transient,” said Soni.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Next Stories
1TRAI directs distributors to place same genre TV channels together, warns action on non-compliance
2ACMA seeks minimum import price levy on two-wheeler alloy wheels imported from China
3Amazon, Oracle battle over Pentagon cloud bid may lead to conflicts of interests probe