50 global investors made their first Indian investment in 2020: Report

The year 2020 recorded venture capital and private equity investments worth $41 billion across 831 deals. The surge in deal value was primarily supported by telecom and retail segments with Reliance Jio and Reliance Retail alone receiving $16 billion VC and PE investment, according to a new report by Praxis Global Alliance, a global management consulting and advisory firm.

2020 has been a historical one with Covid impacting all geographies and industries. However, despite the pandemic, the Indian growth story remains strong. India is expected to be the third-largest economy by 2030 with a GDP (gross domestic product) of $7 trillion in 2030, said the report. It has seen robust activity both in public and private markets.

“Indian private market is going strong with a record investment of $41 billion in 2020 despite Covid,” said Madhur Singhal, managing partner and CEO, Praxis Global Alliance. “India’s private equity and venture capital landscape has truly matured and has proven resilient in fueling India’s economic growth.”

The first-of-its-kind research report ‘India Investments Pulse 2020’ is supported by rich insights from over 125 VC/PE investors on the evolution of the VC/PE ecosystem, changes across deal-making, fundraising, exits as well as their overall outlook for 2021.

The report said that India has a strong macro-economic outlook and has been resilient during Covid. Deal activity in public markets remained strong despite Covid. There were 43 IPOs (initial public offering), $3.6 billion raised through IPOs and 1.15x growth in benchmark indices.

Telecom and retail received the highest funding in 2020. Investors expect technology and internet (consumer apps), healthcare and life sciences, and SaaS (software-as-a-service), cloud, AI and analytics to become more attractive in the next few years.

2020 saw lower exit activity with 148 exits worth $5.1 billion in 2020, down from 197 exits worth $9.2 billion in 2019.

Fundraising activity in 2020 remained lukewarm with $5.4 billion raised in 2020 against $7.6 billion in 2019. As a result, VC and PE dry powder stood at $9.7 billion at the end of 2020 against $12.2 billion in 2019.

Investors have an optimistic outlook for the VC and PE environment in 2021. More than 60 per cent of investors expect the overall VC and PE scenario across fundraising, deal activity at different stages, and exits to improve in 2021.

More than 50 international and over 20 Indian investors made their first Indian VC and PE investment in 2020, said the Praxis report. India added 14 unicorns in 2020 alone and is home to 37 active unicorns as of December 2020.

$41 bn invested across 831 VC/PE deals in 2020.

$39 bn across 916 deals in 2019.

$81% total deal value was invested in over  $100 mn bucket.

43 IPOs, $3.6 bn raised through IPOs, 1.15x growth in benchmark indices.

148 exits worth $5.1 bn in 2020, down from 197 exits worth $9.2 bn in 2019.

50 international and 20 Indian investors made their first Indian VC/PE investment in 2020.

14 unicorns added in 2020 alone, India is home to 37 active unicorns as of December 2020.

(Source: Praxis Global Alliance report)