Press release

18 May 2022 Mumbai, IN

Y-o-Y PE/VC investments in April 2022 declined by 27% to US$5.5 billion, due to a slowdown in large start-up investments: IVCA-EY report

Mumbai, 18 May 2022. Y-o-Y PE/VC investments in April 2022 declined by 27% to US$5.5 billion, due to a slowdown in large start-up investments according to the IVCA-EY report

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  • IVCA-EY monthly PE/VC roundup: April 2022

  • VC/start-up investments in April 2022 declined by 50% y-o-y to US$1.6 billion across 82 deals
  • Growth investments were the highest in April 2022 at US$2.8 billion, three times the value recorded in April 2021

Mumbai, 18 May 2022: According to the IVCA-EY monthly PE/VC roundup, April 2022 recorded investments worth US$5.5 billion across 117 deals, including 16 large deals worth US$4.0 billion. Exits recorded US$1.2 billion across 13 deals, including six open market exits worth US$483 million and one buyback worth US$330 million.

Vivek Soni, Partner and National Leader Private Equity Services, EY said,“April 2022 recorded US$5.5 billion in PE/VC investments, 27% lower than April 2021 and 11% higher than March 2022. Growth investments were back at the top after nine months with more than 2x growth y-o-y while monthly start-up investments recorded a 50% y-o-y decline.

The US Fed has started tightening monetary policy with a 50 bps interest rate hike and business risk premium /discount rates have gone up globally, which has had a significant negative impact on valuations of listed loss-making but growth-oriented start-ups. This is expected to have a spillover effect on the private capital side as well. Both start-up valuations and deal closures could see some slowdown in the coming few months.

Nonetheless, overall PE/VC investment flows in the Indian market continue to remain strong amidst global headwinds. The largest deal in April 2022 saw Verse Innovations raise a funding round of US$805 million which is the second-largest in the media and entertainment sector. Riding on the post-pandemic shift in consumer preference towards consuming content and entertainment online, the Indian media and entertainment sector has seen a surge in investments since 2021. The spotlight section of our report covers this in more detail.

In the absence of large strategic and secondary deals, PE/VC exits remained subdued at US$1.2 billion. With capital markets remaining volatile, PE/VC-backed IPOs are expected to be pushed further back and those that are going ahead with their listing plans are revisiting both issue size as well as valuations. 

While the US Fed tightening is expected to reduce global liquidity, the larger international funds are sitting on large amounts of dry powder raised last year. India, which remains one of the few large economies with strong growth, is expected to lead emerging market capital allocations. Downside risks that can temper growth expectations and PE/VC investment activity include rising inflation, oil prices, dollar appreciation vs Indian Rupee and rising Indian interest rates.”


PE/ VC investments in April 2022 were ~US$5.5 billion, 27% lower than the value recorded in April 2021 (US$7.5 billion) and 11% higher than investments in March 2022 (US$5.0 billion). April 2022 recorded 117 deals, 67% higher than April 2021 (70 deals) and at par with deals in March 2022 (111 deals). 72% of the total PE/ VC investments in April 2022 were pure-play investments (excluding real estate and infrastructure sectors) compared to 92% in April 2021.

April 2022 recorded 16 large deals (deals of value greater than or equal to US$100 million) aggregating US$4.0 billion, compared to 17 large deals worth US$6.3 billion in April 2021 and 12 deals worth US$2.7 billion in March 2022. The largest deal in April 2022 saw OTTP, CPPIB, Sumeru Ventures and others invest US$805 million in Verse Innovations, which owns Dailyhunt (a content and news aggregator platform) and Josh (a short format video platform).

By deal type, growth deals received maximum PE/VC investments in April 2022 at US$2.8 billion across 21 deals (US$904 million in April 2021 across 12 deals). Growth investments have obtained the monthly top spot after nine months and accounted for 51% of all investments in April 2022. Start-up investments were the second-highest with US$1.6 billion invested across 82 deals (US$3.0 billion across 41 deals in April 2021). Buyouts recorded US$707 million across three deals (five deals worth US$3.2 billion in April 2021). PIPE investments recorded US$174 million across three deals (five deals worth US$203 million in April 2021). Credit investments recorded US$157 million across eight deals (US$244 million across seven deals in April 2021).

From a sector point of view, financial services was the top sector in April 2022 with US$1.5 billion in PE/VC investments across 22 deals (US$616 million across 13 deals in April 2021). After a long time, the infrastructure sector recorded large deals, taking the second spot with US$896 million invested across six deals (US$217 million invested across five deals in April 2021). This was mainly on account of the US$516 million investment in TATA Power’s renewable energy arm by Blackrock and Mubadala. The third-largest sector was media and entertainment with US$840 billion recorded across six deals (US$515 million across three deals in April 2021), propped up by the large US$805 million PE/VC investment in Verse Innovations.

Spotlight: Media and entertainment sector investment trends

2020 saw demand patterns for media and content shift as consumers actively sought alternatives and had the time to try new things. Aided by the growth of digital infrastructure, digital media adoption accelerated. Consequently, consumption patterns shifted and increased across online news, gaming, and entertainment.

According to the recent EY-FICCI M&E report, titled ‘Tuning into consumer - Indian M&E rebounds with a customer-centric approach’:

  •  Digital media grew the most and consequently increased its contribution to the media and entertainment sector from 16% in 2019 to 19% in 2021.
  • In 2021, Comscore data indicates that online news had a reach of 467 million as compared to 503 million smartphones in India; by 2025 it is expected to grow to over 750 million.
  • Digital subscriptions grew by 29% in 2021 with 80 million paid video subscriptions across almost 40 million Indian households.

According to a recent EY- All India Gaming Federation (AIGF) report, titled ‘Online gaming in India – The GST conundrum’:

  • The Indian online gaming sector reached over US$1 billion in 2020, a growth of more than 17.3 percent from US$543 million in 2016. With its current trajectory, it is expected to reach US$2 billion by 2023, in terms of rake fees earned.
  • India is currently the fourth-largest online gaming market globally. Online gamers in India are estimated to grow from 360 million in 2020 to 510 million in 2022. 
As a result, PE/VC investments in the media and entertainment sector recorded a sharp increase in 2021. Investments in the sector in 2021 were more than the investments in the sector in the previous four years combined. The momentum has continued into 2022 with US$1.5 billion PE/VC investments received in 2022 till date.
Eight out of the top 10 deals in the sector happened in 2021 and 2022 with four deals of value greater than US$500 million.
The online media and streaming sector was the largest sub-sector accounting for more than 50% of PE/VC investments by value and volume between 2017-2022 (Jan-Apr). Online gaming was the next largest sub-sector accounting for 31% of the PE/VC investments by value and 22% by volume.
Five start-ups – Dailyhunt, Sharechat, Dream Sports Fields, Dream11, and the Ahmedabad IPL franchise – have received almost 60% of all PE/VC investments in the sector since 2017.

April 2022 recorded 26 exits worth US$1.2 billion compared to US$2.7 billion recorded across 13 exits in April 2021 and US$2.3 billion across 26 exits in March 2022.
In April 2022, open market exits were the highest in terms of value worth US$483 million across six deals (US$17 million across three deals in April 2021). Buybacks were the second-highest with the US$330 million buybacks done by Mu Sigma of its stake from General Atlantic and Sequoia Capital. Strategic exits were the highest in terms of numbers with 16 deals. However, the deal values were undisclosed on 14 deals (four strategic deals worth US$400 million in April 2021). 


April 2022 recorded a total fundraise of US$1.5 billion across 16 funds compared to US$569 million raised in April 2021 by eight funds. The largest fundraise in April 2022 was by Elevation Capital which raised its eighth India dedicated fund at $670 million, which is its largest-ever corpus. 

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About IVCA

The Indian Private Equity & Venture Capital Association (IVCA), is the apex body promoting the Alternative Investment Funds (AIFs) in India and promotes stable, long-term capital flow (Private Equity (PE), Venture Capital (VC) and Angel Capital) in India. 

With leading VC/PE firms, institutional investors, banks, corporate advisers, accountants, lawyers and other service providers as members, it serves as a powerful platform for all stakeholders to interact with each other. Being the face of the Industry, it helps establish high standards of governance, ethics, business conduct and professional competence. With a prime motive to support the ecosystem, it facilitates contact with policy makers, research institutions, universities, trade associations and other relevant organizations. Thus, support entrepreneurial activity, innovation and job creation.