VC investment in India crosses a new record with near $8B investments: KPMG Venture Pulse Q2 2021 Report

During Q2’21, VC investment in India soared past the previous record high set in Q4’19, driven not only by VC investors but also by more traditional funds feeling a sense of FOMO given the broad applicability of digital business models in the pandemic.

A diversity of companies are attracting VC investment in India, in particular those focused on direct-to-consumer offerings, including e-commerce, food delivery, hyper-local grocery delivery, video sharing, and gaming. India saw a growing range of fintech companies raising significant funding rounds during the quarter. Investors continued to pour money into edtech companies in India. Food delivery was also very hot in Q2’21

Commenting on the India findings, Nitish Poddar, Partner and National Leader- Private Equity, KPMG in India said, “We have seen more and more tech enabled companies in India raising funds from the capital markets. This opens a new avenue for early, mid and late stage financial sponsors to cash in on their investments. This is a significant shift from an exit route available to financial investors previously, which will only increase the attractiveness of these businesses.”

Anand Vermani, Partner and Co-Head – Corporate Finance, KPMG in India said, “VC deals count in India saw an unprecedented incline continuing the rally that began from the third quarter of 2020. Major investments are chasing solutions that are built around financial services and delivery; cutting across businesses that offer on-demand financial support, B2B e-commerce, D2C, meals & grocery, supply chain & logistics, and mobility. The advent of the so called traditional funds into this segment with large ticket investment lends a strong vote of confidence and validation to operating models of these new age businesses.”

While globally fintech was the most attractive sector of investment, health, biotech, edtech, gaming and food delivery continued to see significant investment activity.

Key Highlights – Q2’21

• Global VC investment rose from $147.2 billion across 8,557 deals in Q1’21 to $157.1 billion across 7,687 deals in Q2’21
• VC investment in Europe reached $34 billion across 1,848 deals in Q2’21 – up from $23.9 billion across 2,150 deals in Q1’21
• The Asia-Pacific region saw solid VC investment in H1’21, despite a dip from $42.8 billion across 2,066 deals in Q1’21 to $38 billion across 1,998 deals in Q2’21
• Corporate investment was very robust in Q2’21 – accounting for $73.9 billion in investment
• First time financing in first half of the year totalled $20.1 billion – well on track to exceed the peak high of $32 billion seen in 2018