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Time of India
an hour ago
- Business
- Time of India
PE-VC investments decline by 10% YoY
Chennai: Private Equity - Venture Capital (PE-VC) investments recorded a 10% decrease at $16.8 billion between January and July of the current calendar year (CY2025) against $18.7 billion in the same seven-month period last year. The investments as on July 31, 2025, exclude those from the real estate sector. Industry experts attribute the dip in investments to global factors such as geopolitical tensions and market uncertainty. In July this year, PE-VC investments dropped by 11.5% at $1.8 billion when compared with $2 billion during the corresponding July of CY2024, data released by research firm Venture Intelligence on Thursday showed. Of this, five major deals collectively accounted for more than $1 billion including Partners Group to acquire a majority stake in Infinity Fincorp for Rs 1,950 crore and Abu Dhabi Investment Authority (ADIA) is set to invest $200 million for a 3% stake in the Indian medical device company Meril. "A key highlight of July's PE investments are the three large buyouts/control transactions of over $200 million each that were announced in the month such as Theobroma, VIP Industries and Infinity Fincorp Solutions. Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Serbia: New Container Houses (Prices May Surprise You) Container House Search Now Undo by Taboola by Taboola Notably, the Theobroma deal marks ChrysCapital's first control transaction in the domestic retail space," Arun Natarajan, founder, Venture Intelligence told TOI. You Can Also Check: Chennai AQI | Weather in Chennai | Bank Holidays in Chennai | Public Holidays in Chennai While the PE-VC investments fell under $2 billion only once in Jan-July last year, the current year witnessed five out of the seven months not touching the $2 billion mark. "Given how volatile the macro environment has been in 2025, the only way to view private investment markets in India thus far in the year is to view it as a 'glass that is half full'. Markets - including the IPO markets, for the right companies - have been quite resilient. With Trump Tariffs now having directly targeted India, we will have to wait and watch out how the impact plays out," he said. Vivek Kumar, co-founder and CEO, VG Angels — an early age angel investment network — observes that the slowdown was more a short-term reset than a long-term shift. "Investors are simply being more cautious right now. Global factors like ongoing geopolitical tensions, and general market uncertainty have made them take a pause and reassess," he added.
Mint
25-07-2025
- Business
- Mint
Yali Capital raises $104 million in debut deep-tech fund
Yali Capital, a deep tech-focused venture capital firm, has closed its ₹ 893 crore (~$104 million) maiden fund. The firm had set out to raise ₹ 500 crore with a ₹ 310 crore greenshoe option but managed to raise more than that from its limited partners, which the founders believe is a sign that India's appetite for deep tech is growing. In fact, the firm raised 78% of its maiden fund from Indian firms and individuals, while the rest was raised from outside sources. Yali Capital's investor base includes corporate entities like Infosys Ltd, Qualcomm Ventures, Tata AIG General Insurance Co. Ltd, Madhusudhan Kela's Singularity Fund of Funds, Kris Gopalakrishnan's family office Pratithi Investments and notable individuals like ideaForge founders Ankit Mehta and Rahul Singh. 'The involvement of family offices has been a significant tailwind,' said Vishesh Rajaram, managing partner at deep-tech-focused venture capital firm Speciale Invest. 'Their longer capital horizon does make them good partners for deep tech founders. Many are moving beyond traditional sectors, actively co-investing in batteries, space, dual-use defense applications, and more.' Overall, Yali Capital is bullish on six sectors within deep tech: chip design, aerospace and surveillance, robotics, genomics, artificial intelligence, and smart manufacturing. The firm is allocating 50% of the fund to chip design and aerospace, while the other 50% will go towards the remaining four sectors mentioned above. The firm's cheque sizes will range from $2 million to $10 million. 'We're allocating 70% of the fund towards early stage (pre-seed, seed and Series A) investments and 30% will go towards late stage (Series D and beyond) companies from the fund,' Yali Capital's founding managing partner Ganapathy Subramaniam told Mint in an interview. He founded the firm with Mathew Cyriac, the former co-head of Blackstone India PE, which managed $3 billion in assets. The $104 million fund is the largest deep tech-focused fund to close so far this year. According to private company data platform Venture Intelligence, Endiya Partners and Triton Fund have raised $92 million and $14 million, respectively, in 2025 for their new deep tech-focused funds. Other than these two, there are five other firms working on raising capital for the sector, including Speciale Invest ($35 million), Mela Ventures ($117 million) and IIMA-CIE's Bharat Innovation Fund II, which is targeting a $150 million fund. India has only about 50 or so deep tech-focused venture capital firms, according to data from market research and data platform Tracxn. The largest deep-tech deals happened in 2023, Venture Intelligence data showed. Hyperspectral satellite imaging firm Pixxel raised the most at $36 million, followed by drone startup NewSpace at $33 million and AgniKul Cosmos at $25 million that year. Yali believes that the government's 2021 Design Linked Incentive (DLI) Scheme to boost semiconductor chip design will help push more and more startups in the chip design and surveillance sectors. 'The DLI scheme is crucial to attract talent back to India to build an Indian chip company. The scheme has a very important role to play,' said Subramaniam. One of Yali Capital's investments, C2i Semiconductors, a fabless chip company, received DLI approval from the ministry of electronics and information technology earlier in January. For deep-tech firms such as Yali Capital, entering at the seed and pre-seed stage allows them to exit companies having made a large return on their investment. 'We believe that India's deep tech ecosystem has matured and, as a result, exit cycles have also shifted. An exit in 7-8 years is highly possible,' Subramaniam said. Yali Capital has made two other investments apart from C2i Semiconductos, robotics startup Perceptyne and oncology genomics startup 4baseCare. Two more are in the pipeline, with the firm planning to make eight investments by the end of the year. Overall, through the fund's lifecycle, the firm plans to make 18 investments: 15 early-stage startups and three late-stage startups. While entering late-stage startups, Yali Capital plans to put in at least $10 million, mostly targeting primary deals and not secondaries. 'If I stay with my late-stage investments for two to three years, then I will almost return the entire capital to investors,' said Subramaniam. Traditionally, deep-tech firms need to give their investments time to mature since timelines for their portfolio companies are longer than traditional bets in sectors like fintech or consumer tech. On average, deep tech startups take between 9 to 10 years to really get going, having spent the years prior investing in their intellectual property and technology. Many investors in the deep-tech sector allude to a phenomenon called the 'Valley of Death', where startups achieve proof-of-concept of their ideas but fail to commercialize them, making it harder for them to get funding after a Series A round. 'What's been missing in deep tech has been scale and monetization because startups haven't found enough domestic customers yet. The government as a customer is still a new phenomenon. Once these patterns are better established and deep-tech firms start generating predictable revenue like peers in SaaS or fintech, growth capital will become available," said Pranav Pai, founding partner and chief investment officer at3one4Capital. Speciale Invest's Rajaram highlighted the need for more patient capital at the Series B and C stage from sovereign funds and corporate VCs, public procurement and anchor customers, and more policy-enabled demand aggregation, similar to the government's Innovations for Defence Excellence programme. 'Bridging this gap is not just about helping startups survive—it's about enabling India to build sovereign capabilities in areas that matter for the future," he said.
Mint
16-06-2025
- Business
- Mint
Plenty of courtships, but no one's tying a knot in Indian edtech
India's mid-stage edtech startups are finding no takers. Once the darlings of investors in 2021, Indian edtech firms—especially in the series A to C stages—are now struggling to raise fresh funds or secure strategic buyers, Mint has learnt. Startups at these stages recorded just three deals totalling $9 million so far in 2025—a staggering drop from $852 million across 50 deals in 2021—according to data provider Venture Intelligence, on the back of slowing demand for online learning and adjacent edtech models post-pandemic. As venture capital dries up, many of these companies are increasingly turning to larger peers for potential mergers or acquisitions to survive and scale. 'We're witnessing a surge in M&A interest across both digital and brick-and-mortar education segments… Smaller companies recognise that joining a larger platform can offer better exit potential," said Varun Gupta, managing director at Avendus, who advises on edtech deals. Gupta noted that several bootstrapped assets—those built with little or no external capital—have scaled profitably and are now attractive M&A targets. Also Read: Capillary Tech to file IPO documents by October; Warburg, others to trim stake Despite increased conversations, deal closures remain elusive. Only seven M&As have occurred in 2025 so far, compared to 46 in 2021. M&A activity in edtech has sharply declined since its peak four years ago of 46 deals worth $3.36 billion. In 2022, deals remained high at 49, but their value dropped to $1.05 billion. The slowdown deepened in 2023 (23 deals, $104 million) and 2024 (12 deals, $138 million). In 2025 so far, only seven deals worth $37 million have been recorded, reflecting continued caution and consolidation. The average size of such deals has also nosedived—from $73 million in 2021 to $5.2 million this year. Unfinished agenda Some recent deals that did close include Imarticus Learning's $6 million acquisition of MyCaptain and FinX's $2 million buyout of BSE Institute. 'Market conditions, such as economic climate and investor sentiment, often lead to valuation disagreements, making negotiations complex. For example, median revenue multiples for edtech companies were around 1.6x in Q4 2024, reflecting a cautious approach by investors," said Nikhil Barshikar, founder and CEO, Imarticus Learning. However, many high-profile acquisition talks are falling through. After an unrealised deal with Allen, Unacademy is now looking to hive off Airlearn, asMintearlier reported. Similarly, Simplilearn, another company said to be exploring a sale,Mintreported earlier, has not found any takers yet. Well-capitalised players, or potential buyers, are approaching M&As cautiously. Physics Wallah's negotiations to acquire Drishti IAS fell apart recently, Entrackr reported last week. Others are choosing to grow organically. 'There are too many companies in each segment of the sector, many without sustainable or scalable business models. What the industry needs now is a period of contraction," said Ronnie Screwvala, chairperson and co-founder, upGrad. 'This means to hold on for the next 18 months to see who will be around without funding, as many will perish," he added. Since 2021, close to 16 funded edtech players like Stoa, Dojo, Bluelearn and Udayy have shut shop, Tracxn data showed. Screwvala also warned that prematurely consolidating with startups that lack viable business models may lead to larger issues later. Also Read: Flexiloans to expand lending offerings, enter insurance post ₹665 crore funding Akshay Chaturvedi, founder and CEO of talent mobility platform said he dropped acquisition plans after evaluating two companies earlier this year after failing to reach an agreement on valuation benchmarks. He declined to name the firms, citing confidentiality. 'We're evaluating companies, but there's continued back and forth on valuations as many are missing their revenue and profit targets," said Chaturvedi. He is looking for acquisitions to grow in Europe and Southeast Asia, and other markets in the revenue range of $10-15 million. What's blocking deals? The hesitation stems from both valuation mismatches and concerns over stable profits in these companies. 'Non-scaled business models don't lead to meaningful or long-term value-accretive M&As. These often turn out to be top-line buyouts that eventually fade, as they aren't sustainable or profitable," said Screwvala. He added that in many of these cases, the growth trajectories look unusually steep and have, in most cases, tapered off. Many startups that raised capital in 2021 at inflated valuations are now unable to justify them with current metrics, making acquirers hesitant. Also Read: Sheela Foam plans to infuse capital in Furlenco as furniture rental market expands Still, investors believe the M&A logjam will ease in the next few years, for firms in the $100-500 million valuation range that have achieved scale. 'We think strategic or financial transactions are a possibility in the coming years…Most of the companies with decent scale—$25 million revenue—are breakeven and/or have cash to get to breakeven," said Mujtaba Wani, principal at GSV Ventures, an edtech-focused global VC firm. 'So the catalyst for M&A will have to be individual initiative."
Mint
10-06-2025
- Business
- Mint
AI-native startups edge out SaaS in investor playbooks as tech shift accelerates
India's venture capital ecosystem is undergoing a pivotal shift in 2025, with investors increasingly backing artificial intelligence (AI)-native startups over traditional software-as-a-service (SaaS) players. Between January and 4 June, AI-focused startups raised $454 million across 65 deals, slightly surpassing SaaS firms, which drew $432 million over 52 deals, according to data from Venture Intelligence. While some overlap exists as SaaS companies adopt AI features, the trend points to a deeper reset in investor priorities. 'AI-led startups are commanding 3–4x valuation premiums over traditional SaaS businesses, thanks to their potential for faster scalability and deeper, more transformative use cases," said Abhinav Chaturvedi, partner at Accel. Also read: 10 Indian AI startups and products to watch out for Blurring boundaries However, to stay competitive with pure-play AI startups, many SaaS companies are now streamlining operations and aggressively investing in artificial intelligence, according to multiple industry executives. This trend is pushing established SaaS companies to retool quickly. 'If SaaS companies don't integrate AI, they are unlikely to survive the next 2–3 years," said Nitin Bhatia, managing director at DC Advisory. 'We're seeing the switch happen where pure-play SaaS startups don't exist anymore. AI is becoming a fundamental part of what they offer—whether it's to enhance customer experience or product capabilities." This transition is also shaping the investment strategies of venture capital firms such as Stellaris Venture Partners, Bessemer Venture Partners, and Accel, who see the convergence of AI and SaaS playing out across their portfolios. Accel's Chaturvedi pointed to SaaS portfolio companies like Chargebee, which is exploring newer monetisation models like usage-based pricing, and BrowserStack and Testsigma, which are embedding AI to automate testing—showing how legacy players are not just adapting but helping shape this transformation. Some of the largest AI-linked fundraises this year include Netradyne's $90 million, SpotDraft's $54 million, and Infinite Uptime's $35 million rounds, according to Venture Intelligence data. The narrowing gap between AI and SaaS deal volumes underscores growing investor appetite for pure-play AI models. Deal data reflects this shift: in 2024, there were 193 SaaS deals versus 145 AI deals. A year earlier, SaaS saw 159 deals compared to just 96 in AI. While SaaS still leads in terms of overall capital raised, AI startups are quickly gaining ground with more focused, domain-specific solutions. Also read: Meta in talks to invest nearly $10 billion in artificial intelligence startup Scale AI Even within traditional SaaS portfolios, companies are recalibrating. 'Our existing SaaS portfolio companies are investing aggressively in AI capabilities. From Whatfix in the digital adoption space to Factors in marketing automation, most of our portfolio companies are already using AI to add features, increase convenience and reduce cost for their customers," said Ritesh Banglani, founding partner at Stellaris Venture Partners. According to Banglani, more than 80% of Stellaris' B2B SaaS deal flow is now led by AI-centric solutions. 'This shift will transform every process within an enterprise from marketing and sales to accounting and finance," he added. A generational shift Industry veterans believe the shift marks a generational reset for Indian software startups. SaaS inflows have dried up, Zoho founder Sridhar Vembu said last week, attributing it to rising investor appetite for AI and growing profitability pressure on SaaS firms. He noted that artificial intelligence is now superseding traditional SaaS models in funding priority. Still, the broader outlook for SaaS remains strong—with a caveat. In August, Bessemer Venture Partners projected that the Indian SaaS market could generate three times more revenue by 2030 compared to today, driven in large part by the infusion of AI. In 2025, Indian SaaS is expected to clock $25 billion in annual recurring revenue. Bessemer also expects India to see a similar shift as the global SaaS wave of the late 2010s—with AI software exports playing a bigger role in the $400 billion global services market. As the Indian startup ecosystem matures, the once-clear boundaries between SaaS and AI are dissolving—with capital, innovation and talent increasingly flowing toward platforms that can do both. Also read: Boom in AI fuels a flurry of startups
Time of India
30-05-2025
- Business
- Time of India
PE-VC investments in May CY2025 hit hard, down to $1.5bn
Chennai: Private equity-venture capital (PE-VC) investments in May witnessed a sharp fall. It fell 48% over April (CY2025) at $2.9 billion and plunged by $2.3 billion when compared with May last year (CY2024) at $3.8 billion. The investments as on May 30, 2025, exclude those from the real estate sector. 'Buyouts have been a key driver of the value of PE investments in recent years. Even in the first quarter of 2025, global PE firms like KKR and TPG, as well as home grown firms like Multiples PE and Everstone have executed significant such control transactions. The pace of large buyout announcements have significantly slowed down in the last couple of months - contributing to the decline in PE investment value,' Arun Natarajan, founder, Venture Intelligence told TOI. Assuming the global economic turbulence settles down, we can expect more confident bets by both Indian and international investors, he added. In May, Porter, an on-demand logistics platform, raising $200 million in a Series F round led by Kedaara Capital and Wellington Management topped the PE-VC investments. It was followed by private equity fund Norwest announcing that it has led a Rs 1,465-crore investment in the non-bank lender IKF Finance. Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Dermatologista recomenda: simples truque elimina o fungo facilmente Acabe com o Fungo Undo Growth in the PE-VC investment sector was also flat during the Jan-May period of CY2025 at $13.5 billion against $13.2 billion during the corresponding period last year, data released by research firm Venture Intelligence on Friday showed. It was dominated by institutional investments in late stage companies that are more than 10 years old at $3.9 billion. Apart from global macro uncertainty, factors including shift in investors sentiment, who are being more cautious with capital deployment influenced investments, according to analysts. Ashutosh Kumar Jha- general partner at Expert Dojo, a US-based startup accelerator and VC firm said, many VC and PE funds have shifted their focus from volume to value. 'These dips aren't always bad news. Sometimes, they just mean investors are thinking harder about where to place their bets.' Noting that dominance of late-stage deals indicate that investors are doubling down on companies that have proven business models and closer to profitability or IPOs, he said, 'Growth looks flat, but this phase could be laying the groundwork for a healthier and more disciplined investment cycle in the second half of the year,' he added. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
