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PE/VC exit deals reach record high of $30.7 bn in January-August: IVCA-EY report

By Anuj Suvarna

  • 15 Sep 2021
PE/VC exit deals reach record high of $30.7 bn in January-August: IVCA-EY report
Credit: Pixabay

Exits in January-August 2021 have totalled $30.7 billion, surpassing the previous high of $27 billion seen in 2018, an IVCA-EY report said on Wednesday.

The month of August 2021 recorded 38 exit deals worth $7.3 billion compared to $67 million in August 2020 and $1.2 billion in July 2021. 

Investors that exited via strategic sale were the highest in terms of value and volume in August 2021 at $3.2 billion across 13 deals followed by exits via secondary sales worth $2.3 billion across six deals.    

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There were seven PE-backed IPOs in August 2021 which saw investors cash out $881 million through offer-for-sale (OFS).    

One of the largest exits in August 2021 saw General Atlantic, TA Associates, Temasek, and other early investors sell their stakes worth around $2.9 billion in Billdesk to Prosus.    

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August 2021 also recorded the first SPAC listing by an Indian company wherein ReNew Power was listed on the NASDAQ via a merger with RMG Acquisition Corp II.    

Among overall sector-wise trends and deals, financial services and consumer sectors have remained as the top sectors for PE/VC-backed listings.    

Sequoia Capital India had the highest number of portfolio companies that went for an IPO which include Indigo Paints, Stove Craft, Craftsman Automation, and Zomato; followed by Temasek with three IPOs and Warburg and IFC which had two each.    

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With the likes of Nykaa, Grofers, Flipkart, Pepperfry, and other unicorns looking to go public, the pipeline of IPO-bound startups is quite strong.

In terms of deal type, buyouts were the highest in August 2021 at $4.7 billion across 11 deals, a rise of eight times from last year.    

Investments by private equity and venture capital funds in August 2021 totalled $10.7 billion across 137 deals, an increase of almost five times from last year.    

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Financial services have quickly caught up after the pandemic to emerge as the top sector in August 2021, recording $2.2 billion versus $1.2 billion a year ago and $435 million in July 2021.   

Next came technology which recorded $1.6 billion versus $33 million a year ago and $1.1 billion in July 2021. Edtech also saw strong investor interest in August 2021, recording $1.2 billion versus $308 million a year ago and $358 million in July 2021.  

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E-commerce has dominated investor interest in 2021, recording $11 billion and accounting for 23% of all investments this year. 

To date in 2021, PE/VC investments have recorded $47.3 billion, 13.7% higher than the previous high recorded in 2018, said Vivek Soni, partner and national leader of private equity services at EY.    

In July 2021, PE/VC investments touched a record high driven by a rush of capital into ecommerce.  

Also, big late-stage technology funding deals have dominated India's startup ecosystem this year, propelling the average ticket size to a record high and even surpassing the average cheque sizes of the past two years cumulatively.

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