India Key Market for PE, VC Activity

As per a report by global risk management firm Kroll, India has accounted for 56% of deal value and 71% volume of the total private equity and venture capital tech activity in the Indian and Southeast Asian markets since 2015. The next biggest market, Singapore accounted for 33 percent of deal value and 10 percent of volume.

Tech Companies are turning to Private Investors

The rapid growth is due to increasing pressure on traditional banks from non-performing loans in India. Technology companies seeking capital have therefore been turning to private investors.

Additionally, governments in these geographies have undertaken policy initiatives to create and maintain investment friendly tech environments that can result in successful digitisation. These initiatives include incubating tech funds with traditional banks, initiating e-governance projects to digitise government services, attracting investment in ancillary industries like enterprise solutions, etc.

Foreign Investors are Making Inroads

Technology is expected to aid and enhance major sectors in these geographies, such as those of finance, education, healthcare, retail, etc. The sector is therefore successfully attracting investments from those looking to capitalise on its fast-paced growth. The report noted that apart from local and regional investors, foreign investors have also demonstrated significant interest and participation.

Throughout 2017, India and Southeast Asia received USD 18 billion in technology deals, up from USD 6.5 billion in 2016, indicating the attractiveness of these high growth markets.

Looking Ahead: Private Equity Investments to Grow

US investors took part in 25 percent of tech investment occurrences from 2015- to the first quarter of this year, followed by Japanese (5 percent) and European (4 percent). This has significantly catalysed the growth of locally grown tech unicorns.

Going ahead, private equity investments in the tech sector may begin to look up in 2018 and beyond. Steadier international interest and buyouts are predicted as more investable targets start to reach the size and growth stage that render them ripe for the picking, the report titled ‘Staying ahead of change: Investing in disruptive tech in India and Southeast Asia’ said.

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