Venture Capital Investments Double in India, Outperform Global Market

According to a new report by KPMG Private Enterprise Venture Pulse, venture capital (VC) investment in India surged in the March quarter, reaching $3.2 billion across 354 deals, doubling from the previous quarter’s $1.6 billion across 313 deals. Fintech remained a key focus area for investors in India, with notable transactions like SK Finance ($160 million) and Perfios ($80 million), despite smaller deal sizes.

Nitish Poddar, partner and national leader of private equity at KPMG in India, highlighted India’s growing VC activity, driven by robust GDP growth and strong demographics. He identified AI, powertech, healthtech, and agritech as promising sectors for future investment.

Globally, VC investments totaled $75.9 billion across 7,520 deals in Q1 2024, declining due to geopolitical tensions and limited exit opportunities. However, cleantech and AI attracted significant investments, with eight of the top ten global deals in Q1 2024 belonging to these sectors.

The report also noted the emergence of new AI-focused unicorn companies globally, including Celestial AI and Together AI in the US, and Miotech in China, among others. While VC investment declined in the Americas and Asia, Europe experienced a rise in funding. The US led global VC funding with $36.6 billion across 2,882 deals.

Looking ahead to the June quarter, the report anticipates increased interest in crypto, blockchain, defence and security technologies, and AI. However, the exit environment remains challenging, leading VC investors to adopt conservative deal-making strategies. Conor Moore, global head of KPMG Private Enterprise, emphasized that VC investors are focusing on AI and cleantech amid tightened funding conditions, with potential expansion into cybersecurity.

Overall, the report highlights India’s growing prominence in the global VC landscape and identifies key sectors driving investment growth amid evolving market conditions.