The new hot spots: Enterprise tech and deeptech lead PE's next wave
This market shift signals a more discerning approach from investors, who are increasingly favouring control deals for deeper operational involvement and clearer exit strategies.
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Deal volume at the growth stage and private equity level, in the $30-100 million range, has increased from last year, even as the number of mega deals (greater than $100 million) in the Indian market has decreased. Much of this is driven by several late-stage startups opting to go public or preparing for an initial public offering (IPO).
“Despite strong deal volumes, the slight dip in aggregate value signals a more selective and disciplined market," said Nishesh Dalal, partner and private equity leader, Deloitte South Asia. “Investors are increasingly focusing on control deals because they want deeper involvement in operations, tighter governance and better clarity on exit pathways."
Several tech companies have gone public this year, having raised their larger rounds in previous years. This includes e-commerce marketplace Meesho, eyewear company Lenskart, stockbroker platform Groww, professional home services provider Urban Co., edtech major PhysicsWallah, and electric vehicle (EV) scooter maker Ather Energy.
Data from investment banking firm Avendus Capital showed that private deals in 2024 reached $6.6 billion, compared to $6.3 billion as of 4 December. It has, however, included deals that are in progress. According to the firm's data, deals sized between $30 million and $50 million stood at 39 this year, compared to 27 in 2024. Similarly, deals sized between $50 million and $100 million, and over $100 million, were at 21 and 17 this year, compared to 14 and 22 in the previous year.
In fact, Avendus highlighted that there are still a few deals to be closed out at the end of the year. “The private funding momentum picked up steam in the last 2 quarters, and 2025 will see both higher overall deal value and volume than last year," said Neeraj Shrimali, managing director and co-head, digital, technology and consumer investment banking at Avendus Capital, told Mint.
On the other hand, data from Venture Intelligence shows that growth-stage funding overall has declined from the previous year—from $5.5 billion in 2024 to $5 billion as of 1 December. However, the data doesn't include deals that are currently in progress, just closed ones.
“One simple correlation is the number of late-stage companies that have decided to go public or are gearing up to go public," said Gopal Jain, managing director and chief executive at private equity firm Gaja Capital.
- The primary trend is a strong increase in the volume of growth-stage deals, offsetting a decline in the number of mega-deals.
- Despite strong volumes, the slight dip in aggregate value indicates a more selective market where investors are disciplined and focused on control deals for greater operational oversight and clearer exit pathways.
- The current wave of tech IPOs is the main factor reshaping the private funding landscape, as these companies have graduated from the late-stage private market.
- Despite short-term pressures from geopolitical uncertainties, investor appetite for Indian PE remains structurally strong, supported by the country's demographics and growing domestic consumption.
- The market will favour highly differentiated enterprise tech, deeptech, and businesses that demonstrate a credible path to profitability, with Avendus pointing to e-commerce, fintech, online services, and SaaS as key PE expenditure areas.
A one-off slowdown
While India saw a significant increase in tech IPOs this year compared to previous years, the softening of volumes and cheque sizes has been attributed to geopolitical and trade uncertainties, such as the US's decision to impose tariffs on the country.
“While there may have been a modest softening in growth-stage private transactions, we should be careful not to over-interpret any single year’s data," said Sudhir Variyar, managing director and deputy chief executive of Multiples Alternate Asset Management. “The longer-term trend is clear: investor appetite for Indian private equity has been expanding steadily, and we expect that structural momentum to continue."
The firm is looking to invest between $500 million and $750 million over the next 18 months in companies across sectors. In February, Multiples acquired a controlling stake in software development company QBurst for $200 million. It also co-led a $50 million investment into Geniemode, a design-led apparel sourcing platform for global retailers, that month as well.
But while global uncertainties have made private equity somewhat skittish, the enthusiasm in the long run remains strong. In fact, in its “Pulse of Private Equity" Q3 report, KPMG noted that the country remains an attractive market for investment due to its ‘sizeable population, attractive demographics, and growing domestic consumption.’
Where PE investments are headed next year
Tech IPOs are expected to continue seeing an uptick in the coming year, according to experts.
The pipeline is looking robust as well. Fintech major PhonePe is expected to make its debut in 2026, as is e-commerce major Flipkart, which is currently in the process of flipping domicile from Singapore back to India. Global hospitality chain OYO is expected to list next year, alongside powerhouses such as Reliance Jio, the National Stock Exchange, and SBI Mutual Fund.
“I think as far as tech is concerned, differentiation is the keyword. Markets will display an appetite for enterprise tech companies, like data analytics, data services, differentiated companies with high revenue per employee," said Jain of Gaja Capital.
Deeptech is likely to see increased interest across all stages as well. With companies like SEDEMAC Mechatronics and Aequs set to go public, their performance after an IPO will determine how investor enthusiasm plays out for the sector. “Businesses that are willing to institutionalize and show a credible path to profitability will attract the most attention in the coming year," said Dalal.
Avendus, on the other hand, pointed out that four sectors are expected to account for a significant portion of PE spending in the coming year. “E-commerce, including new-age brands, fintech, online services, and SaaS (software-as-a-service), will be where investors will put a lot of their money in the coming year," said Shrimali.
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