India In Sight #74
Weekly updates on Indian private markets.
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Key reports in this edition:
Marketplaces in India by 2am VC
Dealtracker October 2024 by Grant Thornton
India’s path to net zero by Honeywell
Forest Stack by JICA x BCG
Fintech lending risk barometer 2024 by Grant Thornton
KEY DEALS
Equity
Sarvagram, a rural household-focused digital lending firm, raised c.$67 million in a Series D funding round led by Peak XV Partners. Other investors include Elevar Equity, Elevation Capital, Temasek and TVS Capital. (November 14, 2024)
The ePlane Company, an electric aircraft startup, raised c.$14 million in a Series B funding round led by Speciale Invest and Antares Ventures. Other investors include Micelio Mobility, Naval Ravikant, Java Capital, Samarthya Investment Advisors, Redstart, and Anicut. (November 14, 2024)
Ingrid, a power sector infrastructure investment trust, secured a commitment of c.$300 million from British International Investment (BII), Norwegian Climate Investment Fund, Norfund, and KLP to form a new platform, EnerGrid, a green energy platform. (November 13, 2024)
Wheelocity, a fresh produce supply chain network, raised c.$15 million in its Series A2 funding round led by Lightspeed Ventures. Other investors include Anicut Capital and Alteria Capital. (November 12, 2024)
Bhanzu, a math-focused edtech platform, raised c.$17 million in its Series B round led by Epiq Capital and Z3 Partners. Existing backers such as Lightspeed Ventures and Eight Roads have also participated in the current round. (November 11, 2024)
[Expected] Zepto, an online grocery delivery and quick commerce app, is looking to raise c.$300 million after its recent fundraising of $1 billion. (November 16, 2024)
HDFC Capital and Runwal Enterprises, a realty developer, have partnered to invest c.$140 million in setting up a platform to develop residential projects for mid and upper income families in Mumbai. (November 11, 2024)
Other Credit Deals and Issuances
Shapoorji Pallonji Group is looking to raise c.$950 million through issuance of bonds. (November 12, 2024)
KEY FUNDS AND FUNDRAISES
Pavestone VC, a venture capital firm, marked the final close of its maiden fund with a target corpus of c.$97 million. (November 14, 2024)
Green Frontier Capital, a climate-focused venture capital firm, launched its maiden fund with a target corpus of c.$140 million. (November 14, 2024)
BlueGreen Ventures, a venture capital firm, launched its maiden fund with a target corpus of c.$75 million. (November 13, 2024)
SBI Ventures, the investment arm of State Bank of India, is looking to raise c.$240 million for its third climate fund. (November 12, 2024)
MARKET INSIGHTS & RESEARCH
Reports
2am VC’s report on ‘Marketplaces in India’ highlights that India's e-commerce market is set to reach $350 billion by 2030, growing at a 21.5% CAGR. With 895 million internet users and 250 million online shoppers, growth is driven by digital infrastructure, vertical marketplaces, and AI-driven personalization. Quick-commerce is projected to hit $40 billion (50% of the e-grocery segment), transforming consumer habits.
Grant Thornton’s ‘Dealtracker October 2024’ details that October saw 204 deals (down by 8% m-o-m) with $11.7 billion value (up by 28% m-o-m). M&A activity saw 75% growth with 79 deals worth $3.5 billion. PE/VC saw 104 deals in the space with $1.4 billion. Key sectors include manufacturing, pharma, consumer, and IT while agri-tech and defense sector saw notable investments as well.
Honeywell’s whitepaper on ‘India’s path to net zero’ highlights that initiatives like Net Zero SEZs, carbon capture tech, and sustainable fuels supported by budgetary and private sector push, have positioned India as a leader in global sustainability supply chains while addressing energy security and economic development challenges.
JICA & BCG’s report on ‘Forest Stack’ highlights that India’s Forest Stack proposes a Digital Public Infrastructure (DPI) integrating data, technology, and governance to enhance conservation, biodiversity, and economic opportunities like carbon credits. Forest stack could generate c.$18–22 billion annually by 2030.
Grant Thornton’s ‘Fintech lending risk barometer 2024’ explains that India's fintech lending sector is rapidly growing, driven by innovation and adoption, with fintech firms accounting for 70% of loans to individuals under 35 and disbursing 100+ million loans in FY 2023 (a 49% y-o-y increase). Leveraging AI, big data, and digital infrastructure, fintechs are transforming lending practices, reaching underserved populations, and driving economic growth.
KPMG’s report on ‘Model risk management (MRM)’ states that the increasing reliance on complex models in financial institutions for decision-making and risk management has heightened model risk, leading to regulatory focus worldwide. Recent guidelines emphasize robust MRM frameworks, including ESG and lifecycle management, to mitigate risks and enhance compliance & financial performance.
PWC’s report on ‘Climate scenario analytics’ explains that climate scenario analytics assesses the financial impact of climate change on financial institutions by modeling physical and transition risks using frameworks. These scenarios, such as Net Zero 2050 and Delayed Transition, help forecast economic variables and evaluate risks to bank portfolios.
Articles
India's SaaS market is projected to grow from $14 billion to over $70 billion by 2030, with a CAGR of 30%+. While horizontal SaaS has driven much of the growth and investor interest, vertical SaaS is poised to gain momentum, potentially shifting the dynamics of the Indian SaaS landscape. Read more. [Paywall]
SEBI is exploring changes to its regulations for Angel Funds following the abolition of the Angel Tax. A recent consultation paper pointed out gaps in operational clarity and investor suitability. SEBI proposes revising existing norms to enhance flexibility and streamline operations for these funds. Read more. [Paywall]
India's Chief Economic Advisor emphasized the need for internal economic reforms to boost the country’s investment potential. The importance of deregulation and fostering the growth of small and medium enterprises (SMEs) is critical as key steps toward positioning India as a global manufacturing hub. Read more.
India's markets faced a turbulent week with equity indices dropping, currency instability, and bond yields under pressure, exacerbated by a rising trade deficit, inflation concerns, and weak consumption. Donald Trump’s re-election in the US and his policies have reignited fears of reduced global capital flows, highlighting emerging markets' dependency on US for investments. Read more.
KPIs
India's economy is on a strong growth trajectory, expected to achieve 7.2% growth in 2024, fueled by robust consumer spending and investments. While inflation has risen recently due to higher food prices, Moody's forecasts moderation ahead driven by India's solid economic fundamentals and resilience.
Retail inflation in India is expected to rise to 6.15% in October, surpassing the RBI's tolerance limit of 6%, driven by persistent food price increases and the fading high base effect.
External commercial borrowings (ECBs) by Indian companies fell to $4.8 billion in September, a $1 billion decline. Financial services dominated the borrowing.
WEEKLY MARKET UPDATE (w/c November 11, 2024)
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