Despite failing to add any significant numbers to the total deal count, Venture capital (VC) investment in India almost doubled in the September quarter in comparison to the previous quarter, according to a KPMG-CB Insights report.
In what could well be called a revival of investor interest, in a series of big-ticket funding, VC companies raked in $1.04 billion between July and September as against $584 million in the preceding three months, although the deal count remained almost stagnant at 108, from 107 in the June quarter.
Notably, venture capital investments in India have been falling since October-December 2015. With a cautious approach and detail analysis of business models and valuations, the VCs have now been laying down performance milestones. The euphoria of 2015 gave way to a skeptical market outlook and investors seeking a bigger presence in the affairs of the company they are funding.
With markets getting matured, September-quarter saw some large funding rounds, with Bigtree Entertainment Pvt. Ltd, which owns online entertainment ticketing platform BookMyShow, raising $75 million, online hotel-room aggregator Oyo about $60 million, TCNS Clothing Co Pvt Ltd, owner of the W brand of women’s clothes, raising $140 million and Concord Biotech Ltd $70 million.
“The investment environment in India is becoming stable with clearer business models emerging in the start-up ecosystem, said Sreedhar Prasad, partner, e-commerce, and start-ups, at KPMG in India.
“Though the speed of investments has not increased, we see a clear increased interest by investors in financial technology start-ups with online-to-offline models which have better control in the ecosystem, as well as interest in the payments space,” Prasad said in a statement.
The scenario is still bleak globally as investments shrank to $24.1 billion in September quarter from $28.1 billion between April and June.
“Given the market conditions, we should continue to see fewer mega rounds over the next quarter. Investors will likely continue to be cautious, with any late-stage deals linked to external milestones, such as development, market penetration, profitability or gross revenues,” Arik Speier, co-leader, KPMG enterprise innovative start-ups network and head of technology, KPMG in Israel, said in a statement.