Venture capital investments down 29% in 2016

For the first time in the past five years, venture capital (VC) investments have seen a drop -- of around 29 per cent -- in 2016. Total VC investments saw a flow of $1,441 million, 28.6 per cent down compared to investments during last year.

According to Venture Intelligence data, in 2016, across 405 deals, VC firms have invested $1,441 million as compared to $2,018 million across 511 deals in 2015.

Since 2012, deals and investment quantum has been increasing. In 2012, VCs invested $945 million in 267 deals, which increased to 275 deals in 2013. However, the value declined to $892 million. In 2014, the value increased to $1,191 million across 324 deals and it further increased to $2,018 million across 511 deals in 2015, according to Venture Intelligence data.

One of the recent top investments was Knowlarity Communications, which raised $20 million from Sequoia Capital India, Mayfield, Delta Partners, Trifecta Capital and BlackSoil Capital in November 2016.

In July 2016 and January 2016, Lendingkart and ScaleArc, respectively, raised $20 million each. Investors in LendingKart included Mayfield, Saama Capital, India Quotient, Bertelsmann India Investments, others and ScaleArc raised money from Nexus Venture Partners, Accel India, Trinity Ventures and others.

The year closed with $18 million investment by Bessemer, Aarin Capital, Orios VP in PharmEasy.

In January, FreshMenu raised $17 million from Lightspeed Ventures, Zodius Capital and others. Similarly, $17 million was invested by SAIF, Matrix Partners India, Bertelsmann India Investments in Treebo Hotels in July 2016.

Active VC firms in 2016 include Accel India (29 deals), Sequoia Capital India (26), Blume Ventures (24), Kalaari Capital (22) and Aarin Capital (18).

VC firms have exited with $1,512 million by exiting from 65 deals in 2016, as compared to $1,564 million across 66 deals.

The top exit during the year was the that of IFC, Sequoia Capital India, CLSA Capital, FMO, Helion Ventures, Aquarius, Aavishkaar Goodwell, Lok Capital, India Financial Inclusion Fund, MicroVentures and Creation Investments from Equitas Holdings in April 2016, through an IPO. The deal amount was $217 million and the exit returns reported a range between 1.5 times to 13.5 times.

Clearstone and TA Associates exited from BillDesk by selling their stake to General Atlantic and Temasek in March 2016. The deal amount was $171 million.

Tiger Global, Accel India, Google Capital sold its investments in CommonFloor to Quikr in January 2016 and the value was $120 million.

IFC, Tiger Global, Acer Technology Ventures, WestBridge have sold their investments in Indecomm Global Services to Capital Square Partners and the value was $90 million.

IFC, FMO, Unitus, Wolfensohn & Co, Lok Capital, India Financial Inclusion Fund, Elevar Equity, WWB ISIS Fund have reported 2.5-7.5 times returns from their exit from Ujjivan Financial Services in May 2016. The deal value was $79 million.

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