In the first quarter of 2024, India witnessed a significant rise in venture capital (VC) investments and the number of transactions, with investments doubling from $1.6 billion over 313 deals in the final quarter of 2023 to $3.2 billion across 354 deals, according to a recent report released on Monday.
The fintech sector continued to draw considerable interest, although with smaller investments per deal, as highlighted in the KPMG Private Enterprise Venture Pulse report.
Nitish Poddar, Partner and National Leader of Private Equity at KPMG in India, noted an increase in VC funding in India, despite a general slowdown in deal activity across Asia. "The trend is likely to accelerate in subsequent quarters, bolstered by strong GDP growth, favorable demographics, and a stable government. Key sectors such as AI, power tech, health tech, and agritech are expected to drive future growth," Poddar commented.
Globally, VC investments declined from $83.8 billion through 9,458 deals in the fourth quarter of 2023 to $75.9 billion via 7,520 transactions in the first quarter of 2024, amid geopolitical tensions, a lack of exit opportunities for VC-backed firms, and decreased funding in later-stage deals.
Investment trends varied by region, with decreases in the Americas and Asia, but an increase in Europe. The report detailed that the Americas led with nearly half of the global VC funding for the quarter, totaling $38.2 billion from 3,205 deals, primarily driven by the United States with $36.6 billion from 2,882 transactions.
In contrast, the Asia-Pacific region attracted $18.9 billion over 2,305 deals, and Europe recorded $17.9 billion from 1,798 transactions.
Conor Moore, Global Head of KPMG Private Enterprise at KPMG International, remarked on the current cautious approach in VC investments. "Given the prolonged dry spell in exit opportunities over the past 18 months, it’s understandable that VC investors are currently conservative in their deal-making," Moore stated.
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