VC & PE funds infused $41 billion in Indian companies in 2020: Report

By: |
March 3, 2021 2:30 AM

The bulk of the funding was cornered by the telecom, retail and consumer platforms. These three sectors collectively garnered over 50% of the capital.

In all, there were 148 exits worth $5.1 billion last year, lower than 197 exits worth $9.2 billion in 2019.

VC and PE funds infused $41 billion in Indian companies in 2020. The investments made across 831 deals is about 6% higher than those closed in the previous year, a report published by Praxis Global Alliance on Tuesday said. VC and PE funds backed firms with investments of $38.9 billion in 2019.

The bulk of the funding was cornered by the telecom, retail and consumer platforms. The three sectors collectively garnered over 50% of the capital. Ed-tech start-up Byju’s, that has been segmented as a consumer platform in the report, alone secured more than $1 billion from investors last year. Investments in retail were led by the spate of deals closed by Reliance.

More than 50 international investors and over 10 domestic investors made their first PE/VC investment in 2020.
VC and PE funds infused a little over $11 billion in telecom across 16 deals last year. Retail sector and consumer apps followed with investments of $6.2 billion and $4.4 billion respectively.

A survey conducted by the firm projects more investors to back technology, SaaS/AI and healthcare & life sciences sectors in the coming years. Investments in Indian tech start-ups have already grown from $4.9 billion in 2016 to $11.3 billion in 2020. Foodtech start-up Zomato alone closed a new $660 million financing round last year.

India defied a pandemic year to create 14 unicorns in 2020, higher than the 10 and eight unicorns it produced in 2019 and 2018 respectively. As of December 2020, India had 37 unicorns or start-ups valued at $1 billion and beyond.

Early stage investments gained pace touching $1.3 billion. “VC and PE funds had a cumulative dry powder of $9.7 billion at the end of 2020 against $12.2 billion in 2019,” analysts said in the report.

Exit activity, however, remained tepid. In all, there were 148 exits worth $5.1 billion last year, lower than 197 exits worth $9.2 billion in 2019.

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