PE/VC inflows to Indian cos fall 40% to $27.9 bn in 2023

Mumbai: Investments from private equity and venture capital funds into domestic companies declined about 40 per cent to $27.9 billion so far this year, while the outflow increased marginally to $19.34 billion year-on-year.

According to the numbers collated by Venture Intelligence that tracks private capital and debt flows, and industry body IVCA, investments by private equity and venture capital funds as of December 20, 2023, fell to a low of $27.9 billion across 697 transactions, as against $47.62 billion inflows in 2022 across 1,364 deals. The year also saw more money being pulled out from the country by private equity players with overall exits touching $19.34 billion from 248 companies as against 233 exists worth $18.45 billion in 2022, according to the data.

Industry watchers, however, said green shoots of more funding is very much visible in the coming year. The funding slowdown this year is a temporary adjustment, and as we move forward, we expect renewed and robust inflows, said Rajat Tandon, president of IVCA (Indian Private Equity and Venture Capitalist Association).

He said the ongoing green shoots of funding indicates an opportune time for venture capitalists, domestic private equity and private capital firms to create pools of capital to cash in on emerging opportunities in the domestic startup ecosystem, which demonstrates resilience in the face of challenges, offer innovative solutions to current market needs, and possess the potential for sustainable growth.

Exits on the rise

n Healthcare & Life Sciences saw 30.2% higher inflow compared to 2022

n IT & ITES sector received 64.5% less funding than 2022

n Top PE Exits: Flipkart, Lenskart, DMI Finance, Mamaearth, and Veritas Finance