PE-VC investments in Indian firms up 57% YoY, hit record $63 bn in 2021

The year had eight investments worth $1 bn or more, led by Flipkart's $3.6 bn pre-IPO round; E-commerce was the favorite sector, attracting $10.3 bn, followed by fintech ($7.7 bn)

Private Equity/Venture Capital (PE-VC) firms invested a record $63 billion across 1,202 deals in Indian companies during 2021, registering a 57 per cent rise over the $39.9 billion (across 913 deals) invested in the previous year, data from Venture Intelligence, which included venture capital type investments, but excluded PE investments in real estate, showed.

The country saw an addition of 44 Unicorns -- VC-funded startups valued at $1 billion or more --- in 2021, 15 of them during Q42021. The $23.4 billion invested into the Information Technology sector dominated list of Unicorns and accounted for more than 37 per cent of the overall value of PE-VC investments in 2021. Q4 saw over $5 billion (across 25 deals) being invested in such companies.

The year witnessed eight investments worth $1 billion or more, led by Flipkart's $3.6 billion pre-IPO round. The next three largest PE investments include Carlyle Group's acquisition of Baring Private Equity Asia's stake in Hexaware Technologies for $3 billion; the $2.8 Billion bid by Blackstone to buy out a 75 per cent stake in publicly listed MphasiS; and Advent International's acquisition of Encora from Warburg Pincus for $1.5 billion.

VC investments rose by over 200 per cent in 2021 to $34.7 billion across 1,070 deals from $11.4 billion in the previous year. The year saw 97 mega deals of over $100 million worth $24 billion, compared to 28 such investments worth $5.5 billion in 2020, according to Venture Intelligence.

E-commerce was the favorite sector among investors in 2021 attracting $10.3 billion, followed by fintech which attracted $7.7 billion.

Sequoia Capital India was the most active investor in 2021 with 105 transactions across 91 companies, followed by global investor Tiger Global with 60 investments across 47 companies.

IT & ITeS companies attracted $40.7 billion during 2021 from 85 Mega deals totalling $31.8 billion.

The BFSI (Banking, Financial Services & Insurance) industry attracted $4.7 billion, a 74 per cent jump from the $2.7 billion raised during previous year. Investments in the industry were led by the Blackstone's $1 billion investments in ASK Group, followed by Ares SSG's $380 million acquisition of distressed realty financier Altico Capital, and SME-focused lender Ofbusiness' $325 million fund raise led by Alpha Wave Global, SoftBank and Tiger Global.

The Healthcare & Life Sciences industry attracted about $3.2 billion, a 28 per cent increase year on year. The education industry came in fourth attracting $3 billion, led by Byjus (which raised about $1.9 billion during 2021) and followed by the higher education focused Eruditus' $650 million raise and Blackstone's acquisition of a controlling stake in Simplilearn for $250 million.