Investment activity by venture capital and private equity funds witnessed a weak start in the new year, recording a 35 per cent fall at USD 1.6 billion in January, a report said on Thursday.
The e-commerce sector contributed a bulk USD 689 million, the highest monthly figure in two years, which helped the overall deal volumes, the report by industry lobby India Venture Capital Association 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 a 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.
When compared with the preceding December 2020 month''s USD 7.1 billion, the investments plummeted 77 per cent, the data showed because there were fewer larger deals -- transactions over USD 100 million.
The largest deals in January 2021 saw a group of investors including Tencent, Lightspeed, Altimeter Capital invest USD 280 million in Udaan.com, an online B2B trading platform, followed by Tiger Global, Steadview, Fidelity and others investing USD 250 million in Zomato, a platform for online food ordering and delivery, it said.
Growth investments were the largest deal segment at USD 717 million across 17 deals, while start-up investments recorded USD 599 million in 52 deals.
There were nine exits totaling to USD 313 million in January, 32 per cent lower than the year-ago period''s USD 461 million and 70 per cent down from December''s USD 1 billion, the report said.
Fundraising for new investments grew to USD 854 million compared to USD 742 million raised in January 2019, it added.