The number of deals in October 2024 was 21% higher year-on-year, with 91 deals compared to 75 in October 2023, according to Vivek Soni, Partner and National Leader, Private Equity Services, EY. As per the report, startup investments during the month stood at $880 million across 56 deals, a 50% drop compared to $1.8 billion across 42 deals in October last year.
“While the startup world is experiencing rapid growth, established and mature companies are experiencing a surge in interest due to their balanced risk-return profiles. These companies promise substantial returns in a shorter period and offer greater predictability compared to investments in early-stage companies. This makes them an attractive target for PE and VC investors looking to generate value from growth investing,” said Soni.
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October 2024 recorded nine over $100 million deals, aggregating $3.3 billion, a 4% decline in value from October 2023 which saw $3.4 billion across 11 deals and 69% higher than September 2023 which recorded $2 billion across eight deals.
The largest deal of the month involved Temasek acquiring an 18% stake in VFS Global Services from Blackstone for $950 million.
From a sectoral perspective, telecommunications has been the largest recipient of growth capital in this period at $10.3 billion, followed by retail and consumer products at $9.3 billion, driven largely by the two major deals in Jio Platforms and Reliance Retail Ventures. E-commerce ranked third with $9.2 billion of growth investments, highlighted by the landmark $3.6 billion deal in Flipkart, the report highlighted.
“Mature and growth-stage companies are typically more stable and established than early-stage startups, with proven business models that reduce investment risk. These companies also offer potential early exit opportunities, through IPOs or acquisitions, etc., enabling PE/VC investors to realize returns in a shorter time frame and often at healthy valuations,” the report said.
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October 2024 also recorded nine exits worth $1.1 billion, compared to $1.9 billion in October 2023 across 22 exits, as per the EY-IVCA report. Secondary exits were the highest in October 2024 at $1.1 billion across four deals and accounted for 96% of overall exits in October.
“While we remain cautiously optimistic in the medium term, for the next 2-3 months, we project tepid PE/VC investment activity. On the exit front, PE-backed IPOs and open market exits are expected to reduce significantly if volatility in midcap-small cap space continues,” stated Soni.
