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TechDealtracker – PE/VC investments in technology

We are pleased to present our report “TechDealtracker” that aims at summarising Private Equity (PE) and Venture Capital (VC) deals in the technology sector. We have been actively tracking PE Investment and M&A deal activities for over a decade now through our flagship publication, Dealtracker, and we continue to emphasise that both these activities will increases the Indian economy gears up to regain its high growth trajectory. Further, we believe that for the Indian economy to grow and far exceed its projected growth rate, India Inc needs to increase its focus on both these activities PE including VC, has always been one of the main sources of funding for the launch and expansion of several start-ups across sectors, technology in particular.

India, from being merely an adaptor or importer of technology, is now becoming a creator for technology-enabled disruptive solutions. There is a growing confidence that Indians can create unique solutions for the local market and also compete actively in the global market. The presence of a variety of investment avenues from angel, to seed to VC to PE to public, has no doubt contributed to this trend and we can safely say that the ecosystem for growth of a start-up is in place. Further, combined with entrepreneurship, these investment avenues have resulted in an explosive growth of start-ups and deal activity in the sector.

The technology sector has been witnessing a strong deal environment and a consistent increase in investment activity It recorded one of the highest ever deal values of US$ 11.5 billion from close to 400 deals in both the M&A and PE segments in 2014. This growth is driven largely by the big ticket e-commerce PE investments, along with large cross-border acquisitions by leading IT majors. The trend has continued in 2015, with large IT and BPO players looking at crossborder acquisitions to consolidate their service offerings and expand geographical coverage.

The PE/ VC investments in the e-commerce sector are growing by leaps and bounds. What started as an inflow of investments into e-commerce shopping portals like Snapdeal, Flipkart, etc in 2014, transformed into a full-fledged focused strategy with aggregators like Ola, Quickr, Foodpanda, etc which secured multimillion dollar investments at billion dollar valuations. This trend is not limited to the Indian technology sector alone -, world class technology companies like Inmobi, Quickheal, etc are also witnessing an increase in PE/ VC investments.

While the examples mentioned above cover largely the big ticket investments, it is important to highlight that a bulk – nearly 80% of PE investment volumes -falls into the sub US$ 10 million deals category. Here again, the fundamental driver is revolutionising concepts and ideas to enable businesses to reach a wider Indian audience, be it to transform the way payments are made or products are delivered, or to improve the aggregation of various service providers through the use of technology.

India is geared up for an active tech dealscape in future and if we get things right, the Silicon Plateau in India will compete and may even replace the Valley. That is the dream…

Write to us at contact@in.gt.com for a copy of the report.

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