PE/VC investments decline by a third to $54.2 billion in 2022: Report

In 2022, the financial services sector recorded the maximum interest both on value at $10.8 billion and volume terms with 249 deals, the report said

PE VC
On the exits front, there was a 55 per cent decline at USD 18.3 billion through 249 deals, it said, pointing out that absence of large strategic and secondary deals caused it
Press Trust of India Mumbai
2 min read Last Updated : Jan 27 2023 | 7:17 PM IST

Investments by private equity and venture capital funds declined by nearly a third to USD 54.2 billion in 2022, which was characterised by a 'funding winter' after consecutive years of surge.

Even after the decline, the year was the second best for India in terms of bets taken by such long term investors on growing Indian companies, a report by industry lobby Ivca and the consultancy firm EY said.

The investments by value were down 29 per cent as compared to USD 75.9 billion in 2021, while by volumes there was a 4.6 per cent decline at 1,211 transactions as against 1,269, the report said, adding that a sharp fall in large deals resulted in the decline.

The firm's partner Vivek Soni said investor interest has been weighed down by inflation woes, recession fears, the rising cost of capital and elevated levels of uncertainty driven by geostrategic challenges.

He added that 99 funds dedicated to India raised USD 17.4 billion in 2022, and there is a high level of dry powder available globally, which has the potential for a rebound in activity.

"We expect the startup space to continue receiving large investments, albeit at valuation multiples lower than 2021. There is high likelihood that Indian PE/VC investments in 2023 shall be meaningfully more than 2022 levels," he said.

Factors to watch out for in the future include headwinds like recession in the developed world, re-emergence of inflation, any flare-up in geo-political conflicts and potentially new and infectious COVID-19 variants.

In 2022, the financial services sector recorded the maximum interest both on value at USD 10.8 billion and volume terms with 249 deals, the report said.

On the exits front, there was a 55 per cent decline at USD 18.3 billion through 249 deals, it said, pointing out that absence of large strategic and secondary deals caused it.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Subscribe to Business Standard digital and get complimentary access to The New York Times

Quarterly Starter

₹900

3 Months

₹300/Month

SAVE 25%

Smart Essential

₹2,700

1 Year

₹225/Month

Save 46%

Super Saver

₹3,900

2 Years

₹162/Month

Subscribe

Renews automatically, cancel anytime

Here’s what’s included in our digital subscription plans

Access to Exclusive Premium Stories Online

  • Over 30 behind the paywall stories daily, handpicked by our editors for subscribers

Complimentary Access to The New York Times

  • News, Games, Cooking, Audio, Wirecutter & The Athletic

Business Standard Epaper

  • Digital replica of our daily newspaper — with options to read, save, and share

Curated Newsletters

  • Insights on markets, finance, politics, tech, and more delivered to your inbox

Market Analysis & Investment Insights

  • In-depth market analysis & insights with access to The Smart Investor

Archives

  • Repository of articles and publications dating back to 1997

Ad-free Reading

  • Uninterrupted reading experience with no advertisements

Seamless Access Across All Devices

  • Access Business Standard across devices — mobile, tablet, or PC, via web or app

More From This Section

Topics :PE/VC investmentsfinancial services

First Published: Jan 27 2023 | 7:17 PM IST

Next Story