PE-VC companies invest $5.9 billion across 164 deals in the Q4FY20

Privatee equity-venture capital (PE-VC) firms invested $5.9 billion across 164 deals in the quarter ended March 2020, 36 per cent lower than the $9.2 billion across 249 transactions during the same period last year.
Investments in the first quarter of 2020 were also 37 per cent lower compared to the previous quarter, which saw $9.4 billion being invested across 227 transactions, according to Venture Intelligence Data. These figures include venture capital investments, but exclude PE investments in real estate.
The latest quarter witnessed 14 PE-VC investments worth $100 million or more, down from the 20 such transactions in the same period last year. The largest PE-VC investment announced during first quarter of 2020 was the $567 million takeover of power generation company RattanIndia Power by Goldman Sachs and Varde Partners. The second largest investment was SoftBank Vision Fund's $507 million investment in Oyo as part of the budget hotel aggregator's ongoing $2 billion fund raising round.
IT & ITeS companies have led the pack, attracting $1.8 billion across 86 transactions. The SoftBank-Oyo deal was followed by food delivery apps - Zomato (which raised $150 million from China-based Alibaba) and Swiggy (which raised $113 million in a round led by South Africa's Naspers).
The larger energy sector deals saw $1.6 billion being invested across six transactions during the first quarter of 2020. Apart from the RattanIndia deal, Singapore-based Temasek and Sweden-based EQT Group set up a $500 million India-focused renewable energy platform, O2 Power. The third largest energy deal during Q1'20 was Actis' $415 million acquisition of solar energy assets from Acme Cleantech Solutions.
"The Coronavirus-related lockdowns and related stock market mayhem brought new PE-VC investment activity to a virtual standstill towards the end of the quarter," said Arun Natarajan, founder, Venture Intelligence.

"Until there is better clarity on the still unfolding health crisis front, most investors are likely to focus their energies on existing portfolio companies and be very selective in making new investments," he added.

2019 Interim Budget wish: Electronics makers seek Rs 1,000-crore seed fund

Interim Budget 2019:

With the 2019 interim budget round the corner, stakeholders in the electronics sector are expecting the government to create a seed fund of Rs 1,000 crore and abolish the angel tax that has hit start-ups hard.

“The Government should create a seed fund of Rs 1,000 crore, which can be matched by industry and VCs (venture capitalists), to provide seed funding to build 1,000 start-ups in the ESDM (electronic system design & manufacturing) space. We have requested the government to create such a fund in the budget in our wish list submitted to the ministry,” said Rajesh Ram Mishra, president, India Electronics and Semiconductor Association (IESA), the trade body representing the ESDM industry.
“We have also recommended to the government to abolish angel tax for ESDM start-ups," Mishra added. "Angel tax and the current policy of getting the start-up valuation done by a merchant banker are hitting ESDM start-ups very hard."

According to IESA, start-ups in electronics and semiconductor space primarily depend on angel and self-funding, as very few VCs in India are investing in ESDM companies.
Additionally, the association has also urged the government to enable research and development (R&D) through provisioning separate budget to fund projects of national interest in the electronics and semiconductor domain and enable collaborative R&D among public sector undertakings, SMEs and start-ups.


 With electronics becoming a key enabler in creating an ‘intelligent’ economy like smart homes, smart transportation, smart cities, the association has urged the government to provide support to create 50 intelligent electronics incubators collaborating with industry in various technology and industry verticals in mission mode similar to Atal Innovation Mission.