VC deals see 30% rise in value in May

Chennai: Buoyed by consumer-centric businesses gaining investor interest, VC deals in May 2018 recorded 44 deals at $310 million, growing 22% in volume and 30% in value year-on-year.

May 2018 is the fifth consecutive month with value crossing $300 million. The numbers reflect a drop in deals from April 2018, which saw 50 deals worth $766 million. Venture Intelligence CEO Arun Natarajan said, “April numbers were driven by the $400-million investment by SoftBank into Paytm Mall. The spread of investment this month is encouraging. From auto-to-insurance and FMCG-focused startups, investors have pumped in money across sectors.”

Ventureast founder & managing partner Sarath Naru said, “Investment in B2C businesses is seeing a resurgence. Opportunities exist in three key areas: White spaces among consumer brands, selling to India No.2 (tier-2 and -3 cities) beyond India No.1, and technology-driven B2C businesses such as fintech, general insurance, etc. We have invested in the last three months in all these kinds of businesses.” With May representing the fifth consecutive month with value crossing $300 million, Natarajan adds that this definitely a sign of turning tides. He adds that exits have seen some innovative models. “The ecosystem has seen a huge upheaval and a sigh of relief in the form of exit for Flipkart. We also saw entertainment company Smaash do a reverse merger to becoming a NASDAQ listed company. Blume Ventures funded e2e Networks saw its IPO covered 70 times when it got listed on NSE Emerge last month,” said Natarajan.

Fintech bagged 7 deals led by investments in Acko, Impact Guru and Oro Wealth.

Consumer brands saw 5 deals with companies like Bira91, Raw Pressery and boAT bagging funding. “This month, we have seen investors like Kalaari Capital and Sequoia India come back strong. Strategic investors like Toyota have made some investments,” added Natarajan.

Last year and even the first quarter of 2018 saw B2B leading investments. However, since April, B2C investments have seen interest. May saw close to 70% funding going to such businesses.

For B2C businesses, Naru of Ventureast says, “the successful ones will be those that understand India is hugely heterogeneous unlike the USA and China, and drive businesses through an understanding of true consumer insights, possibly even counter-intuitive insights.”