Kolkata: A steep fall in Chinese venture capital investment has dragged down the overall Q4 VC investment globally. The overall venture capital (VC) investment, which had reached record heights of $71 billion in Q4'18, has now come down to $53 billion in Q1'19 and analysts attributed this sharp fall to the significant drop in Chinese VC investment, among other factors. Interestingly however, when it comes to VC investment scenario in India, there has been a positive growth in the country as automotive services companies gained ground. At least that's what the Q1'19 edition of KPMG Enterprise's Venture Pulse report suggested. The US and European VC investment also remained relatively robust quarter over quarter during this period, the report said.
The KPMG study said that although India may not have seen any $1 billion+ rounds this quarter, the country attracted a number of $100 million+ deals. Automotive services companies, for instance, were a big hit with VC investors in Q1'19. In fact, automobile marketplace platforms also continued to receive attention and this trend is expected to continue for the next several quarters, it said.
Interestingly, there have been other lucrative and potentially key sectors in India as well, which can come up really big. There has been no clear leader in this case, so to say. "Edtech has the potential to become a truly breakout sector in India. The sector has evolved from companies simply offering online digital classes to providing access to both online and offline tutorial offerings, to now offering even more innovative options. With no clear leader in the space, many companies are competing to develop content and raise funding rounds. It is anyone's game -which will make the next few quarters very critical," said Nitish Poddar, Partner and National Leader - Private Equity, KPMG in India.
The report said that globally, VC deal volume declined for the fourth consecutive quarter with only 2,657 deals – representing the lowest number in 31 quarters – since Q2'11. The continued decline in deal volume was felt in every region, but was particularly pronounced in Europe – which saw deal volume drop from 882 deals in Q4'18 to 487 deals in Q1'19.
The largest deals for the quarter included a $5 billion investment in New York-based The We Company and a $4.5 billion investment in Singapore's Grab Taxi. In Q1'19, the US saw continued strength in deal value, reaching $32.6 billion - the second highest quarterly total in the past 7 years. Venture investment in the US also remained strong.
