Q1 ’23 shows 66% decline in PE-VC investments

The largest investment in Q1’23 was the $700 million investment in renewable energy producer Greenko Group by Singapore’s GIC, Abu Dhabi Investment Authority (ADIA) and other investors. The other top investments included ADIA’s $500 million in omni-channel eyewear retailer Lenskart and General Atlantic’s $350 million investment in PhonePe

Private equity - Venture capital (PE-VC) firms invested over $5.6 billion, spread over 184 deals, in Indian companies in the first three months of this year, reveals data from Venture Intelligence.

These figures include Venture Capital type investments, but exclude PE investments in real estate. Venture Intelligence is a research service focused on private company financials, transactions, and their valuation.

Talking to Bizz Buzz, Arun Natarajan, founder, Venture Intelligence, says “Increasing large ticket PE investments in sectors like energy and healthcare as well as return of interest in select late stage tech companies augurs well. Given that the funding slowdown had truly set in during the April-June 2022 period, the base for YOY comparison in the quarters ahead should also be favourable”.

The investment amount represents a 66 per cent fall over the $16.4 billion (across 422 deals) invested in the same period during 2022 and also down by 41 per cent when compared to the immediate previous quarter (which witnessed $9.6 billion being invested across 236 deals). Deal volumes in Q1'23 also declined 56 per cent compared to Q1'22 and was down by 22 per cent compared to the immediate previous quarter.

Q1’23 saw 16 mega deals ($100 M+ rounds) worth $3.4 billion, compared to 42 such investments (worth $11 billion) in Q1’22 and 21 such deals (worth $7 billion) in the immediate previous quarter.

The largest investment in Q1’23 was the $700 million investment in renewable energy producer Greenko Group by Singapore’s GIC, Abu Dhabi Investment Authority (ADIA) and other investors. The other top investments included ADIA’s $500 million in omni-channel eyewear retailer Lenskart and General Atlantic’s $350 million investment in PhonePe (as part of the fintech unicorn's ongoing round). This was followed by Carlyle Group’s acquisition of skincare and beauty platform VLCC Wellness for $300 million.

IT & ITeS topped the industry table attracting $2.3 billion across 117 deals (a 73 per cent fall from the $8.5 billion across 300 deals in Q1'22).

Deals in the tech industry were led by the mega investments in Lenskart, PhonePe and insurtech startup InsuranceDekho ($150 million investment led by Goldman Sachs and TVS Capital Funds). The energy industry came in next, attracting $1.3 billion in Q1’23 led by the $700 million investment in the Greenko Group. This was followed by CPPIB’s investment in renewable energy firm Renew Power (totaling $400 million across two tranches) and the solar and agri waste-to-energy converter SAEL’s $60 million fundraise from Norfund.

Healthcare and life sciences industry attracted about $782 million across 18 deals during Q1’23 - a 27% decrease from the $1.1 billion invested across 25 deals in Q1'22. Investments in the sector were topped by two buyouts: Carlyle’s of VLCC Wellness followed by TA Associates’ of Synokem Pharmaceuticals.