Impact investments lower than Venture Capital and Private Equity: IIT-Madras study

CHENNAI: The average investment per deal in impact investments was about $2.82 million, much lower than the overall average deal size of $32 million seen in Venture Capital and Private Equity (VCPE) investments, according to a study by the IIT-Madras.

"This is also lower than the average deal size seen in early stage VCPE investments $12.6 million. This indicates that social venture investments happen more in early stage of the company as compared to conventional venture investments," the study conducted recently by the Department of Management Studies said.

The study is the fifth in the series of IIT Madras Management Department, based on an analysis of 523 deals in 212 companies, involving 114 investors over a period of 13 years.

The fifth Annual Report on Indian Venture Capital and Private Equity, 'Convergence of Patience, Purpose, and Profit' was released by IIT Madras Director Bhaskar Ramamurthi and received by TV Mohandas Pai, Chairman of Manipal Global Education, and Co-Founder, Aarin Capital at a function.

The study also found that bulk of the investment has been in B2C businesses, which indicated that most social venture investments have been in companies that were directly providing their products and services to end consumers.

"Social investors have invested in more number of companies as compared to main stream investors. However, in terms of amount invested, foreign investors and mainstream investors have made more investment," it said.