PE-VC funding slips, late-stage companies raise more

CHENNAI: Private equity and venture capital investments tapered in August with the heightened bullishness of July giving way to cautious optimism.
Around $7.1 billion worth PEVC investments across 112 deals were recorded in August with transactions more skewed towards funds raised by growth and late-stage tech companies, according to data from Venture Intelligence.
In comparison, July saw over 126 deals worth over $9.1 billion with deal flow distributed across stages.PE-VC investments have hit record levels this year. For January-August 2021, investments stand at around $44.6 billion across over 700 deals.

In August, mature companies raised large-ticket rounds as they contemplated their next steps to go public and also consolidate their position. Exits also doubled in the month in terms of value at $3.8 billion compared to around $1.7 billion last month.
“From July to August, we have gone from wildly optimistic to cautiously optimistic. There is neither a steep fall nor a sharp climb in August and, across stages, we saw almost the same kind of deal count and value as July,” Arun Natarajan, founder, Venture Intelligence, said. “Besides watching how the internet IPOs perform, it’s also important to get a reading on the US Fed’s signals as anything that happens in the US will likely impact the liquidity in Indian private markets,” he added.
The largest deal of the month was Hinduja Global Solutions, the BPO arm of Hinduja Group, selling its healthcare services business to PE fund Barings Private Equity Asia for around $1.2 billion. Dailyhunt’s $450-million fundraise, which included a secondary sale by early investors, and Unacademy’s $440-million series-H round were other large deals.
Executive education firm Eruditus raised $650 million from Accel, SoftBank, and others, turning a unicorn. BharatPe was another unicorn this month, raising $370 million from Tiger Global and others. The month also saw API platform Postman becoming the most valued SaaS startup in India in a $225-million fund-raise.
Analysts said investment trends in future will depend on how other lined-up internet IPOs perform in the public markets. There is still a lot of liquidity and the ecosystem has not hit its peak yet, they said. Natarajan noted that given the valuations, the market is also seeing more sellers with increasing cases of deals with secondary components.