Indian impact enterprises see fall in investments in 2020 amid pandemic: Report
There were 243 equity infusions and 13 exits by investors during the year, which was marred by the pandemic since March
Mumbai: Indian impact enterprises, which have a positive effect on society, received USD 2.6 billion in equity investments from dedicated investors in 2020, down 25% as compared to the previous year, according to a report.
The India Impact Investors Council said deal activity continued despite the global health pandemic and its accompanying effects on the business and economic environment.
The impact investors continued to pledge their support to solve critical social and environmental challenges through investments in scalable, tech-based, innovative social enterprises, the report said.
There were 243 equity infusions and 13 exits by investors during the year, which was marred by the pandemic since March.
Notwithstanding the pandemic, Indian impact enterprises have proved to be resilient: we see continued interest from investors in investing in a variety of innovative tech-led impact ideas,” the council’s chief executive Ramraj Pai said.
While the overall investments were down 25%, there was a 16% jump in seed-stage investment volume, the statement said, adding that the early-stage play is the highest in agriculture, livelihoods and healthcare sector.
The education sector proved to be a winner in 2020, with USD 660 million invested across 47 deals; it said that the investment volumes were up 65% and the transactions were up by 20%. Online test prep and K10 segments led the way with the highest investor interest.
Despite the pandemic, there was a 70% fall in the volume of healthcare investments, it said, adding that investors are actively investing in early-stage healthcare enterprises focused on telemedicine, AI-based solutions, cloud-enabled diagnostic tests.
There was degrowth in the late-stage deals on financial inclusion, mainly because of doubts over customers’ creditworthiness impacted by the pandemic, it said.
Impact investing has contributed towards 11 of the 17 Sustainable Development Goals adopted by the US, and enterprises focused on SDG 5 (Gender Equality), and SDG 9 (Industry, Innovation and Infrastructure) received the highest volume of investments in 2020, it said.