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Driven by heightened interest of private equity investors in start-ups and online ventures, the IT & ITeS sector in India attracted $1.64 billion funding in the July-September period, says consultancy firm PwC.
The Information Technology and IT-enabled services sector attracted $1.64 billion through 56 deals, accounting for more-than-half of the total PE investments ($3.01 billion) during the third quarter of 2014, PwC said in its ‘MoneyTree India Report Q3 2014’.
While this is a two-fold jump over the previous quarter from $746 million via 47 deals, the funding is more than 2.5 fold higher compared to the same period last year ($618 million in 41 deals) in the IT-ITeS sector, it added.
The largest deal during the quarter was that of Flipkart ($1 billion), while other deals in the sector included those in Hike ($65 million), Quickr ($60 million), Snapdeal ($50 million), Olacabs ($42 million), Freecharge.in and BigBasket ($33 million each).
“The third quarter of the year has witnessed a stellar performance in the IT & ITeS sector in both value and volume... The average deal size in this sector has also surged in this quarter, from $17.3 million in Q2 to $29.3 million in this quarter,” PwC said.
The average deal size in July-September 2013 period stood at $15.1 million.
The online services sub-sector has received almost 85 per cent of the total deal value, with $1.39 billion coming in through 28 deals.
This was followed by mobile services ($138 million in nine deals) and enterprise software ($79 million in 13 deals).
“e-commerce business continued to attract investor interest driven by strong growth prospects. The e-commerce market continues to be a primarily minority stake market, with the majority of deal flow driven by growth-stage deals,” PwC India Technology Industry Leader Sandeep Ladda said.
New online e-commerce business segments like classifieds, real estate, grocery and healthcare have started to exhibit significant growth opportunities, he added.
Looking ahead, companies in m-commerce and digital technologies (SMAC) are expected to be in favour, Ladda said.
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