The logo of the upcoming World Economic Forum 2022 (WEF) is pictured on a window in the congress center in Alpenresort Davos, Switzerland, May 21, 2022. REUTERS/Arnd Wiegmann/File Photo
DAVOS, Switzerland, May 22 – Global private equity firm General Atlantic plans to invest $2 billion in India and Southeast Asia over the next two years after falling valuations made the region’s startups more attractive have, a senior official told Reuters.
General Atlantic is in early investment talks with about 15 companies in sectors including technology, financial services, retail and consumer, Sandeep Naik, head of its India and Southeast Asia business, said in an interview.
The startup market, especially in India, is going through a rough patch. After raising a record $35 billion in 2021, the founders are struggling to attract cash, fueling fears of lower valuations and forcing some to cut jobs. Continue reading
After investing just $190 million in Indian startups in 2021, the lowest year ever, General Atlantic is now poised to loosen its purse strings, Naik said in an interview at the World Economic Forum in the Swiss ski resort of Davos.
“Realism sets in. We have been waiting for the value creation to take place. We are ready now,” Naik said of General Atlantic’s plans for India and Southeast Asia, where it has investments of more than $4.5 billion, mostly in India.
“We’re very bullish on India, Indonesia and Vietnam,” Naik added, but declined to name the companies he’s considering.
General Atlantic’s high-profile Indian investments include education technology companies like Byju’s, which provides 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 retailer PT MAP Boga Adiperkasa and Philippines-based social entertainment platform Kumu.
Many technology companies around the world have suffered in recent weeks as the conflict in Ukraine and rising interest rates weighed on investor sentiment. Japan’s SoftBank has reported a record loss of $26.2 billion at its Vision Fund investment arm.
In view of the difficult market environment and declining valuations, General Atlantic advises all portfolio companies to examine consolidation options.
“Now is the best time to consolidate… Stark gets stronger,” Naik said.
Reporting by Aditya Kalra in Davos; Editing by Alexander Smith
Our standards: The Trust Principles.