India VC market ends on a high note in 2019: KPMG
New Delhi, Jan 30 (IANS) The investment by venture capitalists was quite strong in India in the fourth quarter of 2019, ending the year on a high note with a number of large mega-deals, said a new report from KPMG.
These deals included a $1-billion funding round by PayTM and a $500-million round by Bengaluru-based business productivity company Udaan.
“Consumer-focused technologies were a critical focus for VC investors in India; in addition to PayTM, online pharmacy company PharmEasy raised $220 million, while home furnishings company Urban Ladder raised $148 million,” said the “Venture Pulse Q4’2019” report.
Foreign investors remained quite active and interested in making investments in India. During Q4 of 2019, Silicon Valley-based Accel closed funding for a $550 million fund, it’s sixth India-focused VC fund. India has also seen an increase in VC investments by Japan’s trading houses.
Fintech continued to be one of India’s strongest sectors of VC investment in the fourth quarter of 2019.
This trend is expected to continue for the foreseeable future given the country’s significant rural and unbanked population and the complexities and challenges associated with building a traditional financial services company in the country, according to the report.
“VC investment in India was relatively mixed during 2019. While VC investment started off soft, the last two quarters have seen a number of excellent deals,” Nitish Poddar, Partner and National Leader-Private Equity, KPMG in India said in a statement.
“This activity is very encouraging and suggests a growing positivity heading into Q1 of 2020. Further, of late, there is a growing interest in the space from Japan’s trading houses, who are betting on the India consumption story,” Poddar said.
The report also revealed that consumer-focused technologies were a critical focus for VC investors in India.
Heading into 2020, companies in India looking to attract attention from VC investors are expected to put more emphasis on reducing their cash flow and providing clear paths to profitability.
Investors are likely to focus their investments on companies with strong and sustainable growth models.
Logistics, education and e-commerce are all expected to remain hot areas of growth, said the report.
VC investment globally remained steady in Q4 of 2019 19 despite a number of market challenges ranging from the ongoing trade tensions between the US and China, the uncertainty leading up to the December general election in Britain, and the continued weakness of China’s economy, KPMG said.
