According to a senior executive from General Atlantic, a global private equity firm, the company plans on investing $2 billion in India and Southeast Asia over the next two years.
The development comes in the wake of falling valuations, which has made regionally startups more attractive.
General Atlantic is in early-stage investment talks with about 15 companies in sectors including technology, financial services, retail and consumer, said Sandeep Naik, the head of its business in India and Southeast Asia.
The market for startups in the region is going through a hard time with founders struggling to attract cash, sparking fears of lower valuations and even forcing some to cut jobs.
After investing $190 million in Indian startups last year, General Atlantic is now ready to loosen its purse strings, said Naik in an interview at the World Economic Forum.
“The realism is setting in. We were waiting for the value creation to happen. We are now ready,” said Naik. “We are very bullish on India, Indonesia and Vietnam”.
The company’s existing high-profile Indian investments include education technology companies such as Byju’s, which offers online tutoring in a country where internet and smartphone use is booming and is valued at around $22 billion.
In recent months, many global tech companies have suffered following the Russia Ukraine war and the rise of interest rates which have hit investor sentiment. Japan’s SoftBank has reported a record loss of $26.2 billion at its Vision Fund investment arm.
Given the headwind facing startups and falling valuations, General Atlantic is advising all its portfolio companies to look at consolidation opportunities. “Now is the best time to consolidate … Strong gets stronger,” said Naik.