The US$ 12.1 billion invested by global private equity and sovereign wealth funds in Reliance Industries’ Jio Platforms (US$ 9.9 billion) and Reliance Retail (US$ 2.3 billion) accounted for 45 percent of the total PE-VC investment value in 2020, according to data from Venture Intelligence, a research service focused on private company financials, transactions and their valuations.
This figure excludes the US$ 10.2 billion in strategic investments by Silicon Valley tech giants Google and Facebook.
The Reliance deals have managed to arrest the overall decline in PE-VC investment figures in 2020 to a marginal two percent, compared to US$ 27.4 billion (across 750 deals) in the first nine months of 2019.
With the mega investments in Reliance Jio coming to a pause, PE-VC investments in July-September 2020 (Q3’20) – US$ 7 billion across 168 deals – fell 48 percent compared to the immediate previous quarter (which saw US$ 13.6 billion across a similar number of deals) and 33 percent compared to the same period last year (US$ 10.5 billion across 232 deals).
Private Equity – Venture Capital (PE-VC) firms invested US$ 26.3 billion (across 547 deals) in the first nine months of 2020.
Apart from the investments in Reliance Group, top investments in Q3’20 include the stressed assets investment by Varde Partners and Goldman Sachs in coal-based power plant operator RattanIndia Power (US$ 567 million), the coming through of the US$ 507 million investment in Oyo Rooms from SoftBank (as a part of its ongoing US$ 1.5 billion round), and the US$ 500 million investment by EQT and Temasek in renewable energy platform O2 Power.
Venture Capital investments fell 18 percent in value (and 26 percent by volume) in the 9 months ended September 2020 (US$ 6.5 billion across 438 deals) compared to the same period last year (US$ 7.9 billion in 594 deals).
The latest quarter however showed green shoots in the VC segment with both foreign (especially US headquartered funds) and India-dedicated funds venturing out to invest US$ 2 billion across 137 deals – up from the US$ 1.4 billion across 134 deals in the immediate previous quarter.
Venture Capital is defined as investments in startups less than ten years old.
Led by Jio, telecom accounted for US$ 10.2 billion of the investment pie during the first nine months of 2020. Bharti Airtel’s data center focused subsidiary Nxtra Data and smartphone manufacturer Lava International chipped in with US$ 235 million and US$ 90 million, respectively.
IT & ITeS companies came in next, attracting US$ 5.2 billion – a 43 percent fall from the US$ 9.1 billion raised during the same period last year. The industry however witnessed a slew of big ticket investments in the latest quarter – including Zomato’s US$ 250 million investment from Kora Management, Tiger Global and Temasek and fantasy sports platform Dream11’s US$ 225 million raise from TPG Capital, Tiger Global, ChrysCapital and other investors.
The SoftBank led US$ 150 million investment in Edtech platform Unacademy created India’s 31st Unicorn and the fourth Unicorn startup minted this year (following Pine Labs, Nykaa and Postman).