Global private equity firm General Atlantic plans to pump $2 billion into India and Southeast Asia over the next two years after falling valuations made the region’s startups more attractive, a senior executive told Reuters.
General Atlantic is in early investment talks with about 15 companies in sectors such as technology, financial services, retail and consumer, Sandeep Naik, the head of his India and Southeast Asia company, said in an interview.
The market for startups, especially in India, is going through a difficult period. After raising a record $35 billion in 2021, the founders are struggling to raise cash, raising fears of lower valuations and forcing some to cut jobs.
After investing just $190 million in Indian startups in 2021, its lowest annual figure ever, General Atlantic is now ready to pull out its wallet, Naik said in an interview at the World Economic Forum in the Swiss ski resort of Davos.
“Realism is starting. We were waiting for the value to be created. We’re done now,” Naik said of General Atlantic’s plans for India and Southeast Asia. It has investments of more than $4.5 billion mainly in India.
“We are very optimistic about India, Indonesia and Vietnam,” Naik added, refusing to name the companies he is looking at.
General Atlantic’s existing high-profile Indian investments include education technology companies such as Byju’s, which offers online tutoring in a country where internet and smartphone use is booming and is valued at around $22 billion.
It has also invested in Reliance Retail, India’s largest retailer, and in Southeast Asia, its portfolio includes Indonesian food and beverage chain PT MAP Boga Adiperkasa and social entertainment platform Kumu in the Philippines.
Many tech companies worldwide have suffered in recent weeks as the conflict in Ukraine and rising interest rates hit investor sentiment. Japan’s SoftBank has reported a record loss of $26.2 billion in the investment arm of the Vision Fund.
Given the difficult market environment and declining valuations, General Atlantic is advising all of its portfolio companies to look at consolidation opportunities.
“Now is the best time to consolidate… Strong is getting stronger,” Naik said.
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