Millennium Post

Venture capital investments dip 25% to 3-year-low in Q1

Venture Capital investments slid to 78 deals worth $275 million during April-June this year, the lowest in any quarter for such investments in the last three years, says a report.

According to data from Venture Intelligence, investment activity in the second quarter of 2017 was 25 per cent lower compared to the same period in 2016 (which witnessed 104 investments worth $309 million).
The activity level was seven per cent lower compared to the immediate previous quarter (January-March) which witnessed 84 deals worth $349 million.
"While challenges in Consumer Internet & Mobile sector had become quite apparent last year, they are beginning to reflect quite starkly in terms of VC investment figures during 2017," Venture Intelligence Founder & CEO Arun Natarajan said.
The largest VC investment during June quarter was Sequoia Capital's $20 million commitment to shared office space provider Awfis.
IT & ITeS companies attracted 54 investments worth $180 million (69 per cent of the activity pie) - down 33 per cent
compared to April-June of 2016.
Financial Services firms led by OneAssist ($18 million) and Ummeed Housing Finance ($5.5 million)- attracted four investments worth $25 million.
Seed rounds witnessed a steep 53 per cent fall in the second quarter of 2017 to 22 transactions (compared to the 47 deals in April-June 2016).
The Series A round (or First Round of institutional investments) was the only category to witness a rise, climbing 15 per cent in the second quarter to 39 transactions, the Venture Intelligence analysis showed.
Bangalore-based startups continued to top the funding charts attracting 26 investments during the quarter despite a down tick from 32 investments in the same period in 2016.
India Inc's fund raising via debt placement up 28%

Indian companies raised over Rs 1.72 lakh crore through private placement of corporate bonds in April-June 2017 to fund business expansion plans, a jump of 28 per cent from the year-ago level.
Through such placement, firms issue debt securities or bonds to institutional investors to raise capital.
According to the data available with markets regulator Securities and Exchange Board of India, companies garnered Rs 1,72,545 crore through debt on a private placement basis in the first quarter of 2017-18 as against Rs 1,34,455 crore in the same period last year.
Besides, the number of issues rose to 972 during the period under review, from 893 a year ago.
These funds have been raised mainly for expansion of business plans, repayment of loans and supporting working capital requirements.
Market analysts attributed the increase in fund-raising through the route to the regulatory initiatives for deepening Indian bond markets, including one on investment limit for foreign portfolio investors being increased.
Besides, the cost of garnering capital through debt is lower than raising funds via equity, they added.
Individually, firms raised Rs 63,819 crore in April, Rs 33,389 crore in May and another Rs 75,337 crore in June.
For the whole of 2016-17, firms mopped up a record Rs 6.41 lakh crore through private placement of debt compared to Rs 4.58 lakh crore in the previous financial year.
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