Flipkart, Byju's Behind India's Record Quarter Of VC Deals
Two of the top 10 global VC investments in July-September were made in Indian firms.
Flipkart Group's $3.6-billion fundraise, the largest venture capital investment in July-September worldwide, propelled a twofold rise in such financing deals in India.
VC investments rose from the previous record of $6.7 billion in April-June to $14.4 billion in July-September in India, according to KPMG's Private Enterprise’s Venture Pulse report. After Flipkart, Byju's $1.7-billion fundraise was the second-biggest contributor.
The investments in Flipkart and Byju's were among the top 10 VC deals globally during the quarter. India also accounted for four of the largest transactions in the Asia-Pacific region.
Investor interest in India's consumer tech startups has spiked as the pandemic forced people to work from home and shop online, and schools operated remotely. During the quarter, nine Indian startups turned unicorns, including edtech firms Eruditus and UpGrad, fintech firm BharatPe and crypto exchange CoinDCX.
Besides Flipkart and Byju's, Eruditus and online retailer Meesho were also among the top 10 Asia-Pacific deals. Other major VC investments in India included the $500-million funding round of ride-hailing firm Ola and e-pharmacy startup PharmEasy's fundraise.
"The money pouring into consumer tech companies, D2C (direct-to-consumer) companies, fintech companies and others in India is only going to get stronger," Nitish Poddar, partner and national leader, private equity at KPMG India, said in the report.
"Already, we have had more unicorns this year than in the last seven or eight years put together. Looking forward, there are a few big IPOs coming down the pipe and, assuming they go well, that is going to strengthen investor confidence even further.”
Key India Highlights
India saw a record 498 venture capital deals during the quarter, up from 376 in the previous three months.
IPO activity was very strong in India, with indications that October-December will be even stronger.
Edtech was an active sector during the quarter. Fintech also continued to attract significant investment and attention from investors in India. While payments continued to attract the most fintech investments in India, VC investors have also shown strong interest in the insurtech space.
Global VC Deals At All-Time High
Globally, too, venture capital investments hit a new record in July-September, reaching $171.7 billion on the back of 8,682 deals. The quarter saw a record 11 deals of more than $1 billion each.
"Q3 was an incredible quarter for VC investments globally as investors continued to pour money into late-stage mega deals," Jonathan Lavender, global head at KPMG, said in the report. "Both the Americas and the U.S. set new records, while Asia attracted the most funding since Q2'18--and it's the second highest quarter of VC investment ever."
Increased participation by less traditional VC investors, robust exit opportunities and an incredible amount of dry powder also helped keep the VC market "very healthy", the report said.
Cleantech and sustainability-focused technologies witnessed a big jump in investor interest in all regions. Fintech also remained a very attractive area, in addition to delivery and logistics, health and biotech, and business-to-business services.
During the third quarter, several of the largest deals globally had a cleantech focus:
$2.5 billion raise by Rivian, an electric vehicle manufacturer.
$2 billion raise by Generate, an alternative energy infrastructure company.
$1.5 billion mop-up by Svolt, an energy storage company.
$700 million raise by Redwood Materials, a battery recycling company.
Key Global Highlights
VC investment in the Americas reached a third straight record high, with $94 billion invested across 3,934 deals. The U.S. accounted for $82.8 billion of this investment and 3,518 of the deals.
VC investment in Europe remained strong, with $27.5 billion of investment across 1,910 deals in Q3, down from the record $36 billion seen in Q2.
The Asia-Pacific region saw $48.1 billion in VC investment across 2,616 deals in Q3, the second highest quarter of VC investment after Q2.
Global corporate-affiliated VC investment reached a record $85.5 billion in Q3, propelling annual CVC-related investment to a record $230.7 billion with a quarter left in the year.
VC-backed exit value fell from a record $399.2 billion in Q2 to $292.4 billion during Q3. Total annual exit value passed the $1 trillion for the first time ever with Q4 still to come.