India bucked the global trend of decline in VC investment during the third quarter of 2024, with significant raises by consumer-focused businesses, said a report on Tuesday.
VC investment in India remained strong at $3.6 billion in the quarter, helped by a number of raises by consumer-focused businesses, according to the KPMG Private Enterprise's Venture Pulse report.
An extremely unusual trend in India during the period under review was large raises by B2C businesses, unlike most other jurisdictions in Asia as well as other regions of the world — B2B attracted the greatest levels of VC investments.
According to the report, while fintech businesses continued to attract much attention in India, VC investors in space have turned cautious recently as the traditional banks increasingly introduced the own products of fintech aimed at large unbanked and underbanked parts of the population.
According to the report, optimism is strong towards a VC market recovery and that next quarters might really see going upwards the level of investment, it said.
As expected, activity has bounced back with a strong lead from consumer-facing consumption sectors. The same trend is expected to continue and investors will support those businesses which fit into two of the key themes - path to profitability and/or high growth trajectory with a very high level of customer engagement," said Nitish Poddar, Partner and National Leader, Private Equity, KPMG in India.
"This, coupled with robust capital markets, is what is driving this renewed VC interest," he said.
AI investments drove lion's share of VC investment activity globally in Q3.
AI is likely to remain an extremely hot investment area, and defense-tech, given ongoing global geopolitical tensions. According to the report, a growing optimism that exit activity is readied for a rebound will be very good for the VC market worldwide as it enters 2025.
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