VC and PE investments almost double in August 2023: Report

Investments in venture capital (VC) and private equity (PE) funds surged to US$ 5.2 billion in August 2023 across 67 deals

September 21, 2023

In August 2022, PE and VC firms invested US$ 2.3 billion

13 transactions exceeded US$ 100 million each, totalling US$ 4.5 billion

There were 14 growth investments amounting to US$ 2.4 billion

The infrastructure sector emerged as the leading recipient of investments in August 2023

Investments in venture capital and private equity funds surged to US$ 5.2 billion in August 2023 across 67 deals, according to a report from the Indian Private Equity and Venture Capital Association (IVCA) and consulting firm EY. This figure represents a significant increase, surpassing the US$ 2.3 billion invested in August 2022. However, it’s worth noting that the number of transactions declined from 32 in the same period last year. The report, a collaboration between the Indian Private Equity and Venture Capital Association (IVCA) and consulting firm EY, provided these insights.

Experts pointed out that investors are approaching cautiously due to the challenging growth prospects for many startups and persistently high valuations. They also highlighted the increasing presence of sovereign wealth funds from Gulf nations in India, which is expected to contribute positively to the Indian startup sector in the medium to long term despite some short-term challenges related to sluggish growth and governance issues at certain startups.

August 2023 witnessed a substantial increase in large deals, with 13 transactions exceeding US$ 100 million each, totalling US$ 4.5 billion. This represents a staggering 416% jump compared to the previous year’s period. Additionally, there were 14 growth investments amounting to US$ 2.4 billion, significantly contrasting the US$ 176 million invested in nine such deals in August 2022.

Startup investments experienced a notable decline, dropping by 62% to US$ 387 million across 27 deals in August 2023, compared to US$ 1 billion spread over 63 deals in August 2022, as outlined in the report.

The infrastructure sector emerged as the leading recipient of investments in August 2023, primarily driven by a substantial investment by GQG Partners Inc. in Adani Power Limited, which accounted for US$ 1.8 billion in PE/VC investments across six deals. The retail and consumer products sector followed closely, securing US$ 1 billion across four deals.

August 2023 set a new record with 37 exits totalling US$ 4.3 billion, marking the highest exit value in 22 months. In comparison, August 2022 saw exits worth US$ 3.2 billion across 28 deals.

The report also highlighted that PE/VC funds successfully raised US$ 1.5 billion in August 2023, a significant increase compared to the US$ 583 million raised in August 2022.

Source: Economic Times

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