Private Equity (PE) investments in India rose to the highest-ever level of $33.1 billion in 2018, across 720 transactions, according to data from research firm Venture Intelligence.
PE investments had already surpassed the previous high — $24.3 billion across 734 deals in 2017 — in the first nine months of 2018.
The huge investments, including venture capital funding in consumer Internet and mobile start-ups such as Swiggy and Byju’s towards the year-end, boosted the total 2018 vault by 36% year-on-year. This data excludes the PE investments in real estate.
“The mid-year Walmart-Flipkart deal clearly re-energised international investors’ appetite for mega bets in Indian Internet and mobile companies,” said Arun Natarajan, founder, Venture Intelligence.
This has helped offset the slowdown in investments in sectors such as financial services, manufacturing and infrastructure towards the year-end triggered by “nervousness in the public markets and the IL&FS scare,” said Mr. Natarajan.
The year saw the emergence of eight new ‘unicorns,’ or start-ups valued at more than $1 billion, according to Venture Intelligence. These include hotel chain OYO, online insurance start-up PolicyBazaar, food delivery start-up Swiggy, Paytm Mall and education tech firm Byju’s in the business-to-consumer segment.
Udan, the fastest
Apart from payments gateway BillDesk, the business-to-business entrants included software-as-a-service start-up Freshworks. Two-year-old business-to-business e-commerce platform Udaan became the fastest firm to reach the unicorn status.
IT & ITeS companies accounted for 32% of the PE investment pie in 2018, attracting $10.6 billion across 383 deals. Swiggy raised $1 billion in a funding round led by South African conglomerate Naspers. Japan’s SoftBank led $1 billion fund infusion into OYO. Digital payments firm Paytm raised $445 million from SoftBank and China’s Alibaba for its e-commerce business, Paytm Mall. Its parent company One97 Communications Limited also raised $356 million from billionaire investor Warren Buffett’s Berkshire Hathaway Inc.
The other large-ticket IT & ITeS investments this year included the $300 million attracted by BillDesk. PolicyBazaar raised $236 million in a funding round led by SoftBank and Swiggy’s rival Zomato raised $410 million across two rounds.
“Whether the PE investment tally of 2019 can outdo the highs of 2018 seems set to hinge substantially on global economic trends and the outcome of the upcoming national elections,” he said.
