How do you make sure technology is serving your business strategy and not the other way around? - The IVCA-EY monthly PE/VC roundup - April 2021
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How do you make sure technology is serving your business strategy and not the other way around? The IVCA-EY monthly PE/VC roundup – April 2021 The better the question. The better the answer. The better the world works.
Our thoughts “ 2021 has recorded four straight months of sequential increase in PE/VC investments, increasing from US$1.6 billion in January to US$7.5 billion in April 2021. On a y-o-y basis, investments recorded more than a seven -fold increase due to the low base effect, as investments in April 2020 were severely curtailed by the then growing uncertainty around the spread of COVID-19. The revival in PE/VC investments has been driven by increase in large deals (value > US$100m). Of the 41 large deals recorded in the first four months of 2021, 32 were in the past two months. While COVID resilient sectors like pharma, healthcare, edtech, online media, SaaS, technology and IT/ITeS continue to see good traction in both value and volume of PE/VC deals, there has been a significant uptick in the value and volume of investments in the e-commerce sector. E- commerce sector has recorded US$3.7 billion in PE/VC investments in the four months of 2021 compared to US$2.8 billion recorded in full-year 2020. The pandemic has accelerated the adoption of e-commerce, which has led to a significant increase in the valuation of many direct to consumer businesses. The sustainability of this trend will be significantly influenced by the equity markets response to the upcoming listing debut of many e-commerce businesses like Zomato, Nykaa, Policybazaar, Flipkart, Delhivery and Grofers that are reportedly aiming for IPO’s. PE/VC exits too have picked up momentum in 2021 with exits worth US$7 billion in the first four months, which is 17% higher than the total value recorded last year. In addition to the uptick in IPOs, as forecast in our annual report, strategic exits too have picked up momentum recording US$2.3 billion so far, highest value in past three years. Large well funded corporates are taking advantage of the current environment to consolidate businesses/and or acquire online capabilities to enhance the value proposition of their existing brick and mortar businesses. Notwithstanding the encouraging build up in PE/VC investment and exit activity in 2021, the second wave of COVID-19 infections is surging in India. New variants of the virus and the slow vaccine rollout are raising fresh concerns which is also reflected in the sharp decline in the number of deals in April 2021 compared to the rising trend in the first three months. We expect investors to remain circumspect till the COVID-19 infection/fatality curve flattens and more clarity emerges on the ramp-up of the vaccine rollout. Investors will be closely watching government policy action for combating this second wave and COVID resilient sectors will continue to be in favor in the short to medium term. Further, the impact of the pandemic on the country’s macro and fiscal health is an emerging cause of concern. Page 2 13 May 2021 EY analysis of VCCEdge data
How do you make sure that you are the disruptor and not the disrupted Monthly trend analysis: April 2021 The better the question. The better the answer. The better the world works.
Key trends
Investments
► PE/VC investments in April 2021(US$7.5 billion) were 7.5 times the value recorded in April 2020 (US$1.1 billion) and 37%
higher compared to the previous month (US$5.5 billion in March 2021). PE/VC investments in April 2020 had been impacted
by COVID-19 related uncertainty that resulted in significant decline in investment activity. The number of deals declined by
12% y-o-y and 36% compared to the previous month (67 deals in April 2021 vs. 76 deals in April 2020 vs. 105 deals in March
2021). The sharp month-on-month decline in the number of deals could be due to investors becoming cautious on account of
the rising second wave of COVID-19 infections in India.
► Pure play PE/VC investments (excluding real estate and infrastructure sectors) recorded more than seven-fold increase in
value invested compared to April 2020 and 53% increase over the previous month (US$6.8 billion in April 2021 vs. US$930
million in April 2020 vs. US$4.5 billion in March 2021), on the back of a few large deals, despite a 23% drop y-o-y and 38%
drop month-on-month in the number of deals (57 deals in April 2021 vs. 74 deals in April 2020 vs. 92 deals in March 2021).
► The real estate and infrastructure asset class recorded a three-fold increase in value invested compared to April 2020 but a
36% decline over the previous month (US$644 million in April 2021 vs. US$208 million in April 2020 vs. US$1 billion in
March 2021). The number of deals recorded a five-fold increase y-o-y and a 30% decline month-on-month (10 deals in April
2021 vs. 2 deals in April 2020 vs. 13 deals in March 2021).
► Like in the previous month, the revival in deal activity in April 2021 has been driven by large deals. April 2021 recorded 15
large deals (value greater than US$100 million) worth US$6.1 billion compared to three large deals worth US$475 million in
April 2020 and 17 large deals worth US$4 billion in March 2021. The largest deal in April 2021 saw a new fund of Blackstone
along with ADIA, UC Investments and GIC announce acquisition of a majority stake (~75%) in Mphasis for around US$2.8
billion. The deal involves an older fund of Blackstone (Blackstone, Blackstone Capital Partners VI) selling its ~55% stake in
Mphasis to Blackstone Capital Partners Asia and Blackstone Capital Partners VIII while also announcing an open offer to
acquire additional 26% stake, taking the combined planned purchase consideration to around US$2.8 billion. The next large
deal saw a group of investors including QIA, GIC, Goldman Sachs, Naspers and others invest US$800 million in Swiggy.
Page 4 13 May 2021 EY analysis of VCCEdge data
Key trends
Investments (continued)
► In April 2021, buyouts were the largest deal segment with US$3.2 billion recorded across five deals (US$204 million across
one deal in April 2020), mainly on account of the US$2.8 billion Mphasis-Blackstone deal. Growth investments recorded
US$2.4 billion in investments across 23 deals (US$370 million across 17 deals in April 2020). Start-up investments recorded
US$1.4 billion across 27 deals (US$417 million across 51 deals in April 2020).
► From a sector point of view, technology was the top sector with US$3.1 billion recorded across nine deals, mainly on account
of the US$2.8 billion Blackstone-Mphasis deals that got announced, followed by e-commerce with US$1.5 billion in
investments across 13 deals, highest value of monthly investments in the sector in the past 31 months. The pandemic has
accelerated the adoption of e-commerce, which has led to the significant increase in valuations of many direct-to-consumer
businesses, stoking significant investor interest. Financial services sector was next in line with US$614 million invested across
12 deals and media and entertainment with US$515 million invested across two deals.
Page 5 13 May 2021 EY analysis of VCCEdge data
Key trends
Exits
► April 2021 recorded 13 exits worth US$2.7 billion, almost 23 times the value of exits in April 2020 (US$117 million) and 25%
higher than the value recorded in March 2021 (US$2.1 billion). Secondary exits in April 2021 were highest at US$2.1 billion
across three deals which includes the US$2 billion Mphasis exit by Blackstone.
► The largest exit in April 2021 saw an older fund of Blackstone (Blackstone, Blackstone Capital Partners VI) sell its ~55% stake
in Mphasis to Blackstone Capital Partners Asia and Blackstone Capital Partners VIII fund for ~US$2 billion. Another major exit
saw Blackstone sell its stake in Aakash Educational Services Limited to Byju’s for a part cash and part share swap
consideration. Press reports indicate a deal valuation of US$1 billion, value of Blackstone’s stake of 37.5% in Aakash
Educational Services Limited being ~$375 million.
Fundraise
► April 2021 recorded total fundraises of US$569 million compared to no fundraise in April 2020 amidst the COVID-19
uncertainty. The largest fundraise in April 2021 saw Alteria Capital raise US$179 million in the first close of its second
venture debt fund.
Page 6 13 May 2021 EY analysis of VCCEdge data
PE/VC monthly headline trends: investments
Total PE/VC investments
US$m #
7,545 105 120
8,000 7,108
6,873 87 100
83 83
76 5,439 81 77 72 81
6,000 77 80
92 67
60 4,070 4,289
4,000 3,864 60
7,489
4,917 5,466 40
2,000 4,649 3,303 1,282
2,210 2,200 20
1,138 1,776 1,022 1,614
- 349 0
Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21
Value (US$m) # of deals Investment in Jio Platforms Investment in Reliance Retail
US$m PE/VC investments: split across asset classes
US$m
8,000 215
7,000 685 429
379 65 936
6,000 2,094 109
5,000 902
15 226
4,000 298
6,428 1,175 6,845
3,000 5,434 270 4,766 5 73
2,000 62 4,064 177 451 4,454
3,757 3,774
208 2,684 90
1,000 1,877 1,675
930 1,347
-
Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21
PE/VC investments (other sectors) (US$m) Real estate (US$m) Infrastructure (US$m)
Page 7 13 May 2021 EY analysis of VCCEdge data
PE/VC monthly headline trends: exits
Total PE/VC exits
US$m #
3,000 29 35
30
21 25
2,000 19
17 20
14 13 13
11 11 11 12 15
1,000 9 2,141
6 1,899 10
2,667
974 1,034 5
117 657 134 67 556 288 313
- 286 0
Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21
Value (US$m) # of exits
US$m PE/VC exits: Split across asset classes
US$m
3,000
-
2,000 -
28
791
62 2,667
1,000 -
1,871
524 1,288
302 1,034
117 134 65 556 129 -
286 355 - 2 450 313
- 159
Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21
Other sectors (US$m) Real estate (US$m) Infrastructure (US$m)
Page 8 13 May 2021 EY analysis of VCCEdge data
PE/VC monthly headline trends: fundraise
Fundraise
US$m #
3,500 10
8 8
2,800 8
6 6
2,100 6
4 4 4 4
1,400 3 4
2 2,195 2 2,374
700 1,476 1 2
- 854
- 50 121 480 93 20 380 479 569
- -
Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21
Total funds raised (US$m) Total # of funds raised
Page 9 13 May 2021 EY analysis of VCCEdge data
PE/VC investments: US$6,845 million over 57 deals (excluding
infrastructure and real estate investments)
Top sectors by value US$m Top sectors by volume
Technology E-commerce 13
3,114
Financial services 12
E-commerce 1,528
Technology 9
Financial services 614
Healthcare 5
Media and entertainment 515
Retail and consumer… 4
Healthcare 359
Education 4
Industrial products 287
Industrial products 3
Others 429 Others 7
Deal value US$m (volume) Deal type US$m (volume)
3086 (3)
5764 (12)
2205 (19)
1412 (27)
357 (11) 589 (8)
89 (22) 47 (3) 47 (4) 95 (4)
US$100m Credit Buyout PIPE Start-up/ Growth
US$20m US$50m US$100m investment Early stage capital
RCP: Retail and consumer products
Page 10 13 May 2021 EY analysis of VCCEdge dataTop PE/VC investments
Top PE/VC investments excluding infrastructure and real estate in April 2021
Company PE Investors Sector Stage US$m Stake (%)
Mphasis Limited Blackstone, ADIA, GIC, UC Investments Technology Buyout ~2,800 ~75
Falcon Edge, Prosus Ventures, Accel,
Bundl Technologies
Goldman Sachs, Qatar Investment E-commerce Growth capital 800 16.0
Private Limited (Swiggy)
Authority, GIC and others
India Quotient Fund II, Lightspeed, Twitter
Mohalla Tech Private Media and
Ventures, Tiger Global Management and Start-up 502 NA
Limited (Sharechat) entertainment
others
Prosus Ventures, Shunwei Capital,
Meesho Inc. E-commerce Start-up 300 NA
SoftBank and others
Manipal Healthcare Private
NIIF Strategic Opportunities Fund Healthcare Growth capital 286 NA
Limited
Parksons Packaging
Warburg Pincus Industrial products Buyout 216 80.0
Limited
Urbanclap Technologies Tiger Global Management, Prosus
E-commerce Growth capital 188 NA
India Private Limited Ventures (Naspers), and others
Razorpay Software Private Matrix India, Ribbit Capital, Sequoia
Financial services Growth capital 160 5.3
Limited Capital, GIC, Tiger Global Management
Neuberger Berman Group, Viking Global
Druva Inc. Investors LP, Atreides Capital, Quebec Technology Growth capital 147 NA
Deposit and Investment Fund and others
UpGrad Education Private Unilazer Ventures, Temasek Holdings
Education Start-up 129 NA
Limited Advisors India Pvt. Ltd.
Page 11 13 May 2021 EY analysis of VCCEdge dataInfrastructure and real estate investments: US$ 644 million over
10 deals
By value US$m By volume
Real estate 429 Real estate 6
Infrastructure 4
Infrastructure 215
Deal value US$m (volume) Deal type US$m (volume)
366 (3)
226 (4)
197 (3)
172 (2) 113 (2) 108 (1)
97 (3)
8 (2) NA (NA) NA (NA)
US$100m Credit Buyout PIPE Start-up/ Growth
US$20m US$50m US$100m investment Early stage capital
Page 12 13 May 2021 EY analysis of VCCEdge dataTop infrastructure and real estate investments
Top infrastructure and real estate investments in April 2021
Company PE investors Sector Stage US$m Stake (%)
Phoenix Tech Zone Private Credit
Varde Partners Real Estate 156 NA
Limited investment
PowerGrid InvIT CPPIB Infrastructure PIPE 108 NA
Dtwelve Spaces Private Falcon Edge, Matrix Partners, Sequoia
Real Estate Growth capital 102 NA
Limited (Stanza Living) Capital and others
Macrotech Developers CDPQ; ADIA, Abu Dhabi’s sovereign fund;
Real Estate Growth capital 100 NA
(Lodha) Brookfield Aand others
152 MW rooftop solar
assets of Azure Power EverSource Capital Infrastructure Buyout 73 100
Global
Page 13 13 May 2021 EY analysis of VCCEdge dataExits: US$2,667 million across 13 deals in April 2021
Exits in April 2021
Deal value US$m (volume) Deal type US$m (volume)
Technology 2023 (3) 2070 (3)
Education 375 (1)
Chemicals 162 (1)
408 (5)
Pharmaceuticals 70 (1) 172 (2)
NA (NA) 17 (3)
IPO Buyback Strategic Secondary Open
Others 36 (7) market
Page 14 13 May 2021 EY analysis of VCCEdge dataTop exits
Top exits in April 2021
Company Sector Sellers Buyer Exit type US$m Stake (%)
Blackstone Capital
Blackstone Capital Partners Asia and ~200
Mphasis Limited Technology Secondary ~55
Partners VI Blackstone Capital 0
Partners VIII
Aakash Educational Think and Learn
Education Blackstone Strategic 375 37.5
Services Limited* Private (Byju's)
Privi Speciality Chemicals Privi Speciality
Chemicals Fairfax Buyback 162 48.8
Limited Chemicals Limited
Corona Remedies Private
Pharmaceuticals Creador ChrysCapital Secondary 70 19.5
Limited
Prime Venture
Delvit Solutions Private
Technology Partners, Kalaari Amazon Strategic 15 100.0
Limited (Perpule)
Capital, VH Capital
IvyCap Ventures,
Pharmarack Technologies Currae Healthtech
Pharmaceuticals IndoHealth Services Strategic 10 30.0
Private Limited Fund, Unicorn India
Ventures
*Blackstone sold its stake in Aakash Educational Services Limited to Byju’s for part cash / part share swap consideration. Press reports suggest a deal valuation of US$1 billion, value of
Blackstone’s stake of 37.5% in Aakash Educational Services Limited approximating to US$375 million.
Page 15 13 May 2021 EY analysis of VCCEdge dataFundraise
Top fundraise/announcements in April 2021
Status Fund US$m Strategy
Raised Alteria Capital 179 Venture debt
Green Growth Equity Fund, Eversource
Raised 137 Green infrastructure
Fund
Raised JC Flowers India opportunities fund 100 Mid-sized distressed assets
Announced Global Bees 75 Early stage
Announced Kotak Investment Advisors 800 ESG compliant Infrastructure
Digitization of small and medium-sized
Announced Amazon Smbhav Venture Fund 250
businesses in Agriculture and healthcare
Announced PI Ventures 76 AI and deep-tech start-ups
Page 16 13 May 2021 EY analysis of VCCEdge dataAbout EY Private Equity Services
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Page 18 13 May 2021 EY analysis of VCCEdge dataEY services for Private Equity
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