Private equity (PE) and venture capital (VC) firms invested $261 million across eight deals during the first quarter of 2019 in Tamil Nadu, down in value by 23% when compared to the same quarter last year. Data collated by Venture Intelligence, a research firm focused on private company financials, transactions and their valuations, shows that during the first quarter of 2018, the State received investments to the tune of $338 million across 19 deals.

Arun Natarajan, founder and managing director of Venture Intelligence, said, “There were significant investments in healthcare and financial sectors during the latest quarter, and the value of PE investments in Tamil Nadu doubled over that in the immediate previous quarter.” During the previous quarter (Q4 2018), PE-VC investments in the State stood at $121 million across nine deals.

Growth potential

In the VC segment, IIT-Madras-incubated Agnikul Cosmos raised funding from Speciale Incept Advisors. “Like with the rest of the country, the average investment size of PE-VC investments has spurted significantly in Tamil Nadu-based deals as well. Investors are more comfortable investing in companies that have already demonstrated growth potential,” Mr. Natarajan said.

During the first quarter of this year, the State saw one angel investment deal when compared to three during the same period in 2018. The investment came into travel technology start-up Pickyourtrail in February. Mr. Natarajan explained that a number of angel tax notices that impacted angel investments across the country towards the end of last year, froze up investments in Tamil Nadu as well. “Since the issue has not been largely addressed by the government, it is expected that investment activity will revert to previous levels in the months ahead,” he said.