EY IVCA – Monthly PE VC Roundup December, 2023

In December 2023, PE/VC investments in India experienced a second consecutive year of decline, with the dollar value falling by 11% year-on-year to $49.8 billion. This was primarily due to a 33% decrease in overall deal volume, specifically in the startup segment which saw a sharp 42% decline in the number of deals. PE/VC investments in startups also fell to 17%, the second lowest in the past 10 years. However, investments in infrastructure and real estate asset classes saw a 23% year-on-year growth, offsetting the decline in pure play PE/VC investments. PE/VC exits experienced healthy growth of 36%, with open market exits reaching an all-time high. Sectors such as technology and e-commerce saw declines in investments, while infrastructure and real estate recorded significant growth. The challenging macroeconomic environment, including inflation and rising cost of capital, has impacted PE/VC investments. Despite this, the Indian equity markets have attracted substantial capital, and there is optimism for growth in deal segments such as growth, buyouts, and PIPE trades in 2024. Overall, there is a positive outlook for Indian PE/VC investments and exits in the coming year.