PE-VC Investments Witness 38 Per Cent Decline in 2023, Falling Below $30 Billion: Report

The value of investments by Private Equity - Venture Capital (PE-VC) firms in India fell by 38 per cent to less than $30 billion in 2023. PE-VC firms invested $29.7 Billion (across 756 deals) in Indian companies in 2023, compared to $47.6 Billion (across 1,362 deals) in the previous year, reported Venture Intelligence, a research service focused on private company financials, transactions, and their valuations. These figures exclude PE investments in Real Estate.

2023 witnessed 67 mega deals ($100 M+ rounds) worth $21.2 Billion, compared to 112 such investments worth $31.8 Billion in 2022. The $2.4 Billion investment in Manipal Hospitals by Temasek (which gained majority control) and TPG Capital was the largest PE-VC investment in 2023.

This was followed by the $1.35 Billion buyout of education loans focused on HDFC Credila by Baring Asia and ChrysCapital and the $1 Billion investment by Qatar Investment Authority (QIA) in Reliance Retail.

2023 saw just 2 "Unicorn" companies (VC-funded start-ups valued at $1 Billion or more) being created, compared to 21 in 2022 (and a record 44 in 2021). Quick commerce start-up Zepto (which attracted $ 231 million led by foreign investors in August 2023), was joined on the Unicorns list towards the year's end by consumer and small business loans firm Incred Finance (which attracted $60 million from domestic Family Offices and HNIs).

By Industry

IT and ITeS companies accounted for $8 Billion of the total PE-VC investment pie in 2023, a 61 per cent decrease when compared with 2022 (which saw $20.7 Billion being invested). The $500 Million each attracted by Quest Global (from Carlyle Group) and Lenskart (from ADIA ) topped the tech industry table, followed by IBS Software raising $450 Million from Apax Partners.

The healthcare and life sciences industry attracted $5.5 Billion during 2023 - a 1.3x increase from the $4.2 Billion raised during the previous year. The $2.4 Billion investment in Manipal Hospitals by Temasek and TPG Capital led the table, followed by two other majority stake acquisitions: the $732 million investment in Indira IVF (by Baring Asia) and the $700 million investment in Care Hospitals by Blackstone.

The energy industry saw $4.5 billion worth of investments in 2023 - a 1.2x increase compared to the $3.9 billion invested in 2022. Energy sector investment was led by the $1 billion investment by Brookfield in Avaada Ventures, followed by the $700 million fundraise of Greenko Group (from ADIA and GIC) and $ 500 million fundraise by Hexa Climate Solutions (from I Squared Capital).

“While large ticket PE investors focused their attention towards sectors like healthcare, financial services, and Infrastructure, 2023 saw the slowdown in growth- and late-stage investing trickle into the Venture Capital segment as well,” noted Arun Natarajan, founder of Venture Intelligence. “Towards the year-end, on the back of the strong public markets, private markets received a dose of optimism, which also translated into a few large growth stage tech investments going through,” he added.