Deepening the funding crisis that startups have been witnessing for some time, the October inflows plunged 75 percent on-year to USD 3.3 billion across 75 deals, including six large deals worth USD 2.2 billion. Exits touched half of the inflows at USD 1.6 billion across 15 deals in the reporting months, a significant rise over the previous month which saw just USD 653 million worth of exits across 24 deals, but 69 percent lower on-year basis, PTI reported quoting data collated by EY for the Indian Private Equity & Venture Capital Association, the umbrella body of the PEs and VCs.
The report said, on a MoM basis, the inflows continued to grow, clipping at 60 percent over the September numbers. In volume terms, the deals saw a 43 percent decline to 75 last month from 132 deals in October 2021.
The report added that Vivek Soni, a partner at EY, blamed inflation woes, global recession fears, the rising cost of capital and elevated levels of uncertainty driven by geopolitical tension for the funding crisis.
October had six USD 100 million-plus deals aggregating to USD 2.2 billion, a sharp drop from 24 large deals worth USD 11.3 billion in October 2021. By deal type, growth investments were the highest in terms of value at USD 2 billion across 13 deals including the USD 1 billion investment in Citiustech by Bain Capital for a 40 percent stake, the report said.
The month saw 15 exits worth USD 1.6 billion compared to USD 5.2 billion in October 2021 across 25 deals and USD 653 million across 24 deals in September 2022. October 2021 had recorded two large secondary exits worth USD 5 billion— the USD 3 billion Hexaware deal between Carlyle and Baring Asia and the USD 1.9 billion VFS Global deal between EQT and Blackstone.
Exits via secondary sale were the highest with four exits worth USD 1.4 billion, the report noted, propped up by the large deal which saw Bain Capital purchase a 40 percent stake in Citiustech for USD 960 million from BPEA EQT, making it the largest exit in the month and the fourth largest this year.
From a sector point of view, healthcare topped with USD 977 million inflows across three deals, followed by financial services, with USD 216 million across 13 deals.
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