Private equity funding is recoding the DNA of tech startups

As private equity funding floods India’s tech startup ecosystem, it’s transforming everything from company to VC behaviour

Vandana, 28 Aug 2019

Large private equity funds who previously shunned high cash burn businesses are increasingly drawn to consumer tech companies

With many of them queuing up to invest at a Series C stage or later, valuations have gone up

While VCs are happy for exits, large PE cheques could also mean companies remaining private longer

More PE money could also mean that the era of crazy startup growth at the cost of fiscal discipline may be over

When Carlyle, the private equity fund with $221.5 billion of assets under management, along with Tiger Global wrote a $100 million cheque for Delhivery in 2017, it stunned many in the startup ecosystem. Carlyle, one of the largest private equity funds globally, is known for its razor-sharp focus on profitability. Yet here it was backing Delhivery, a logistics tech company with losses of Rs 631 crore ($88.2 million) in the year ended March 2017.

AUTHOR

Vandana

Vandana is based in Delhi. She covers vertically focussed startups in consumer internet space and also writes on travel tech and smartphones for The Ken. She has spent 13 years in journalism covering a wide range of subjects- equity markets, mutual funds to education and skilling, working at organisations such as Business Standard, CNBC TV18 and The Week in the past.

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