India In Sight #78
Weekly updates on Indian private markets.
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Key reports in this edition:
India Alpha: The Techade of Opportunity by Kalaari Capital
How startups are redefining the makeup industry by Entrackr
Financing the climate health frontier by Quadria Capital
Energy transition: India’s journey to net zero by 2070 by IVCA & EY
Succession planning for family businesses by PWC
Democratization of entrepreneurship in India by KPMG
India mutual fund tracker by Motilal Oswal
KEY DEALS
Equity
Piramal Alternatives invested c.$22 million in 3Gen Consulting, a healthcare revenue cycle management services company through its India Credit Opportunities Fund II. (December 13, 2024)
RMZ, a real estate developer, partnered with CPPIB to invest c.$750 million in RMZ Nexus, a Mumbai-based office park asset. (December 12, 2024)
K-12 Techno Services, an education service provider, raised c.$40 million in a mix of primary and secondary transaction, from Kenro Capital, a growth-stage focused secondaries fund. (December 12, 2024)
Rebel Foods, a food delivery platform, raised c.$210 million in its Series G funding round led by Temasek and Evolvence, via a mix of primary and secondary transaction. (December 12, 2024)
Zetwerk, a B2B contract manufacturing startup, raised c.$70 million from Khosla Ventures, Baillie Gifford and Rakesh Gangwal at an estimated valuation of c.$3 billion. (December 12, 2024)
SolarSquare, a cleantech startup, raised c.$40 million in a funding round led by Lightspeed. Other investors include Lightrock, Elevation Capital, Lowercarbon, Rainmatter, and Gruhas Proptech. (December 12, 2024)
CarDekho, an automobile marketplace, raised c.$60 million in a funding round led by Navis Capital Partners, Liquidity Group, and MUFG’s Dragon Fund, for its South East Asia unit. (December 11, 2024)
Warburg Pincus to invest c.$180 million in Shriram Housing Finance, exceeding its initial commitment by 20%. (December 11, 2024)
Haber, an industrial AI startup, raised c.$44 million in its Series C funding round led by Creaegis, BEENEXT, Accel and Alteria Capital ($6 million debt). (December 11, 2024)
Lambda Test, an AI-powered unified enterprise test execution platform, raised c.$38 million in its Series A funding round led by Avataar Ventures and Qualcomm Ventures. (December 10, 2024)
Shubham Housing Development Finance, a mortgage lender, raised c.$118 million in its Series F funding round led by Multiples PE. Other investors include Asian Development Bank and BII. (December 10, 2024)
Somerset Indus Capital, a healthcare-focused PE firm, acquired a minority stake in Cyrix Healthcare, a healthcare solutions provider, for c.$17 million. (December 10, 2024)
Other Credit Deals and Issuances
Snapmint, a no-cost EMI platform, raised c.$18 million in a mix of debt and equity led by Prudent Investment Managers, Perpetuity Ventures and Pegasus Fininivest. (December 12, 2024)
KEY FUNDS AND FUNDRAISES
Stride Ventures, a domestic venture debt firm, launched its fourth fund with a target corpus of c.$300 million. (December 12, 2024)
MARKET INSIGHTS & RESEARCH
Reports
Kalaari Capital’s report on ‘India Alpha: The Techade of Opportunity’ showcases India's rise as a global innovation hub and world’s 3rd-largest startup ecosystem, with its manufacturing sector projected to triple to $1.5T by 2030 and services reaching $3.9T. By 2030, startups could contribute over $100B to India’s GDP, a 4x increase from today. Key opportunity areas include deep tech, fintech, AI, EVs, SaaS, and the $11T climate innovation market.
Entrackr’s report on ‘How startups are redefining the makeup industry’ analyzes the Indian beauty industry which is expected to grow from $15.6B in 2022 to $17.4B by 2025. New age D2C startups are challenging traditional giants as these brands excel in innovation and digital-first strategies, resonating with Gen Z and Millennials.
Quadria Capital’s report on ‘Financing the climate health frontier’ explores the intersection of climate change and health in India. There is a $3B annual market opportunity for private players in India to scale resilient infra, early warning systems, and health-focused innovations. A prioritization framework is presented to guide interventions based on social risk and funding maturity.
IVCA & EY’s report on ‘Energy transition: India’s journey to net zero by 2070’ reflects a multi-faceted energy transition strategy. With renewable energy capacity growing from 24 GW in FY15 to 136 GW in FY25, and non-fossil fuel capacity reaching 45% of total power generation, India is on track to meet its 2030 targets. India also plans to triple nuclear power capacity by 2031-32, emphasizing energy security.
PWC’s report on ‘Succession planning for family businesses’ underscores the importance of succession planning for transitions in family-owned businesses, (90% of listed companies). However, only 63% of these businesses have formal governance structures. A robust plan includes ownership frameworks, alignment with future goals, legal/tax considerations, and strategies to address family dynamics.
KPMG’s report on ‘Democratization of entrepreneurship in India’ highlights the shift towards inclusivity in India's entrepreneurial landscape, driven by initiatives like Startup India and Atal Innovation Mission. With over 140K recognized startups and 100 unicorns, the ecosystem contributes 10-15% to GDP growth. Tier II and III cities are emerging as entrepreneurial hubs, supported by government and private sector collaboration, while 20.5% of MSMEs are women-led.
Motilal Oswal’s ‘India mutual fund tracker’ highlights a record high total AUM of c.$800B (+1.2% MoM), driven by equity MF growth. SIP contributions remained stable at c.$3B, up 48.3% YoY, reflecting robust retail investor participation. Good report capturing the Indian Mutual Fund trends and themes.
Articles
India's data centre industry is witnessing exponential growth, drawing over $60B in investments from 2019 to 2024 and is projected to exceed $100B by 2027. This surge will expand capacity to 2,070 MW by 2025, with key players like Colt, CapitaLand, and major tech firms spearheading the growth, cementing India’s position as a global data centre hub. Read more.
M&A activity in India dropped 45% YoY in H1 2024 to 37 deals, down from 67 in H1 2023, due to lingering effects of the funding winter. However, H2 2024 saw a resurgence with notable acquisitions like Zappfresh acquiring Bonsaro and Reliance's talks with D2C startup TagZ Foods, signaling renewed momentum in the startup ecosystem. [Paywall] Read more.
India's IPO market thrived in 2024 despite funding challenges, with 12 new-age tech startups raising a cumulative $3.4B, including $2.3B via OFS. Notably, 11 of these startups debuted at a premium, reflecting strong investor appetite. [Paywall] Read more.
India is grappling with the challenge of regulating AI to balance innovation with accountability and job protection. Experts and policymakers emphasize the need for a nuanced framework to ensure responsible AI development without stifling its transformative potential. [Paywall] Read more
India's "Make in India" initiative and the "China Plus One" strategy have attracted global manufacturing giants, supported by government incentives that boost jobs, local supply chains, and advanced technology. Key players like Samsung and Apple focus on smartphone production, while Micron and CG Power target the growing chipmaking sector. [Paywall] Read more.
KPIs
India's CPI inflation is forecasted at 4.7-4.8% for FY25, driven by easing food inflation and stable global commodity prices. Favorable harvests and lower global food and energy costs support this outlook. In November 2024, CPI inflation moderated to 5.5%.
India's economy is forecasted to grow at 6.8% in 2024-25 and 6.9% in 2025-26, driven by urban consumption, services, and infrastructure investments. Despite a Q2 2023-24 slowdown to 5.4% due to weak manufacturing, S&P Global Ratings remains optimistic, expecting easing monetary policy and declining inflation in the coming years.
Government expressed confidence in India's economic recovery despite recent slowdowns due to elections and global factors. Festive spending and infrastructure projects are driving momentum, reaffirming India’s status as the fastest-growing large economy. Modern technologies and innovation will fuel future growth, with government targets expected to be met by March.
WEEKLY MARKET UPDATE (w/c December 09, 2024)
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