Gloomy start for VC/PE funds in 2021

Mumbai: Investment activity by venture capital (VC) and private equity (PE) funds witnessed a weak start in the new year, recording a 35 per cent fall at $1.6 billion in January, a report said on Thursday.

The e-Commerce sector contributed a bulk of $689 million, the highest monthly figure in two years, which helped the overall deal volumes, the report by industry lobby India Venture Capital Association (IVCA) and consultant EY, said.

EY's partner Vivek Soni said January started on a 'sombre' note, but the deal pipeline remains robust as investment teams at funds are busy working on proposals with due diligence and negotiations. In our view, the global macro has thrust the India investment opportunity in a favourable position and most PE/VC investors are inclined towards investing increased amounts in larger deals, he said.

Acknowledging that despite concerns surrounding the second wave of Covid-19 infections, new mutant virus strains and the complexity of the vaccine rollout, most Indian corporates and investors seem to be having a positive view and the consultancy maintains its bullish outlook on deals.