Venture capital (VC) in India was robust in Q1 2021 with a wide range of sectors attracting 100 million dollar plus funding rounds including edtech, grocery delivery and gaming, KPMG Pvt Enterprise said on Thursday.
The velocity of deals was also quite rapid, with companies getting higher valuations, it said in its quarterly report.
Insurance as a whole is a growing sector in India, particularly general insurance and health insurance. The penetration of insurance products in the country is increasing with consumers becoming more interested in different products than they have been historically.
This has led to growth both in terms of traditional insurance businesses digital insurance businesses, said the report.
Because of the relative early maturity of both in India, they have been growing together as a result of societal evolution. This potential offered by the industry is expected to drive increasing VC investment over time.
The report said IPO activity is also expected to pick up in India given a number of the large raises held in Q1'21 were viewed as pre-IPO rounds.
Nitish Poddar, Partner and National Leader of Private Equity at KPMG in India. said interest from VC investors in India is at an all-time high. The pandemic has just been a catalyst for new-age tech consumers and tech businesses.
"Many deals that were put on hold and the investors were waiting to see the impact of pandemic are now coming out of the pipe and seeing significant investor interest. Pandemic has elevated some of these businesses to a new higher level of platform and this positivity is expected to continue in the near term," he said.
At a global level, said the report, VC investment rose from 98.2 billion dollars across 7,329 deals in Q4'20 to 1.27 billion dollars across 6,508 deals in Q1'21.
The Americas saw a record 74.4 billion dollars in investment across 3,310 deals in Q1'21 - up from 47.6 billion dollars across 3,399 deals in Q4'20. The US accounted for 69 billion dollars of this total (3,042 deals) - up from 45 billion dollars in Q4'20.
VC investment in Europe reached a new record of 21 billion dollars across 1,430 deals in Q1'21, up from the previous high of 15.8 billion dollars across 1,937 deals in Q4'20.
The Asia Pacific region saw 31 billion dollars in investment across 1,615 deals in Q1'21 - a robust amount compared to historical norms despite a drop from 34.5 billion dollars across 1,840 deals in Q4'20.
Unicorn financings rose dramatically in Q1'21, accounting for 49.7 billion dollars raised across 182 unicorn funding rounds compared to 101 billion dollars raised across 403 rounds in 2020.
VC-backed exit activity rose to a new record, climbing from an already significant high of 209.5 billion dollars across 649 exits in Q4'20 to 283.8 billion dollars across 667 exits in Q1'21, said the report.