If projections from Bain & Company are to be believed, the funding landscape for startups in India is getting better this year. Five private equity (PE) investors that score highest on the transaction size criterion invested a total of USD 10 billion in the first half of 2024, exceeding their USD 8 billion investment for the same period the previous year.

The Swedish corporation EQT is at the top of the list. Its Indian division completed the USD 3 billion enterprise value acquisition of Nasdaq-listed Perficient. Its total assets now stand at $3.5 billion after it invested USD 500 million in WSO2, a "software as a service" provider.

The PE giant is a formidable power in the nation, having spent over USd 8 billion in more than 30 projects. It declared that it will make almost $5 billion in investments in India this year. Blackstone, which completed transactions totaling $2.5 billion in the first half of this year, comes in second.

Three more international players who rank third are next in line. These are TPG (having acquired the digital services business Altimetrik), KKR (having acquired Healthium Medtech with an enterprise value of $840 million), and domestically based ChrysCapital (having invested $700 million in the National Stock Exchange to retain its ownership and Rs. 830 crore in the Centre for Sight).

During the same period last year, their portion of the PE deal value increased to 75% from 50%. The buyouts, whose share of transaction value increased to 55% in the first half of this year from 47% in the same period last year, have been the focus of PE funds.

With seven agreements totaling more than USD 500 million in the first half, it was evident that large transactions were back, highlighting a deliberate move toward size. Evidently, consumer technology is once again a favorite. In the first half of 2024, the deal value in this category reached $2.3 billion, up from $1.3 billion in the same period the previous year.

Partner Prabhav Kashyap of Bain & Company stated that PEs were narrowly focused and targeted a few projects like Zepto has raised $665 million, Meesho $275 million, Lenskart $200 million, and PocketFM $100 million.

"PEs invested in companies where there was a clear path to profitability." Kashyap stated that in information technology/information technology-enabled services, the focus was on specialized segments rather than the larger industry, such as data and analytics or digital IT firms. In manufacturing, agreements will be made in the packaging space, component manufacturing, energy transition, and electronics manufacturing during the next 12-18 months.

Big Deal

USD 3.5 bn: Total deal value of EQT, the top PE investor

USD 2.5 bn: Blackstone’s total deal value

USD 1 bn: Deal values of TPG, KKR, and ChysCapital each

USD 2.3 bn: Deal value in consumer tech segment in H1CY24 than $1.3 bn in H1CY23