The fund infusion by venture capital investors into companies and startups has been severely impacted by the COVID-19 pandemic, and this is likely to remain muted in the ongoing quarter (July-September), said a KPMG report.
Nitish Poddar, Partner and National Leader, Private Equity at KPMG in India, said: "India is a very attractive market for VC investors. While funding is likely going to be muted again in Q3 2020, due to the impact of COVID-19, investment is expected to pick up again by the end of the year."
He added that fintech remains one of India's most attractive sectors for investment, in addition to healthtech, medtech and gaming. Over the longer term, agritech is well-positioned to see increasing investment as well, Poddar added.
The report noted that after steadily rising throughout 2019, India saw a record quarter to close off the year. That has, however, since reversed inevitably, given the impact of the pandemic.
"It remains to be seen how long the slump will persist, or even its true depth, although deals are still able to get done if need be," the report said.
Meanwhile, the month of May recorded investments worth $5.4 billion across 58 deals, with $4.6 billion invested in Jio Platforms, which accounted for 85% of all PE /VC investments in May according to the IVCA-EY monthly PE roundup.
Private equity and venture capital investments almost doubled in May 2020 on year on year basis.
Jio Platforms received $4.6 billion in PE/VC investments in May 2020, accounting for 85 per cent of all PE/VC investments during the month.
The Financial services sector accounts for over 60 per cent of all PE/VC exits by value and volume in May.
Fundraises in the first five months of 2020 are a third of the funds raised during the same period last year.
Exits recorded $286 million across 11 deals, with financial services sector accounting for over 60% of all exits by value and volume.