Q2 investment in VC-backed firms drops 69% to $1.05 bn

Investments into venture capital backed companies in India plunged to $1.05 billion in the September quarter - down 69 per cent from the year-ago period, a report said on Thursday.

In the July-September quarter last year, the investments stood at $3.41 billion spread across 156 deals. The investments in the September quarter this year were however much higher than $584 million seen in the previous three months -- April-June, 2016.

The number of deals, year-on-year, were down to 108 in the September quarter, according to Venture Pulse -- the quarterly global report on VC trends published jointly by KPMG International and CB Insights. CB Insights is mainly into data mining and analysis.

"Venture capital investment in India rebounded in Q3'16 compared to Q2'16... While investment dollars might be down, the quality of investments has increased dramatically as VC investors have focused on companies with clear business models and greater profitability potential," it said. The report noted further that the concept of burning money has mostly evaporated in India, with self-broadcasting technologies being the only hot area in which investors appear to be less cautious with their funding. KPMG in India's Partner (E-Commerce and Startups) Sreedhar Prasad said investment environment in the country is becoming stable with clearer business models emerging in the startup ecosystem. Globally, the total investments touched $24.1 billion across 1,983 deals in the third quarter.