Giving Compass' Take:
- Critical trends in impact investing in India reveal the significant weight of COVID-19 on the development sector, prompting more tech investment for the future.
- How will these trends affect individual donor charitable giving?
- Read about the implications of COVID-19 on India's nonprofits.
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Despite the global health pandemic and its accompanying effects on the business and economic environment in 2020, impact enterprises received USD 2.6 billion in investments across 243 equity deals and saw 13 successful exits.
And while overall investments fell by 25 percent vis-à-vis 2019, impact investors continued to pledge their support to solving critical social and environmental challenges through investments in scalable, tech-based, innovative social enterprises.
According to the annual impact investment research report, ‘2020 in Retrospect: India Impact Investment Trends’, the Indian impact sector will be more tech-led in the future. The COVID-19 pandemic has been a game-changer for the sector, with the lockdown and physical distancing norms rapidly increasing the adoption of internet and digital devices across all classes of society.
While overall impact investments in 2020 fell 25 percent as compared to 2019, the sector witnessed a 16 percent rise in seed stage investment volume. Investors were most keen to back early-stage tech enterprises in the agriculture, livelihoods, and healthcare sectors. The decline in overall impact investment in fact was led by the fall in late-stage investments in financial access and healthcare enterprises.
- Agriculture stayed the course during the year
- Education witnessed a record level of investment
- Healthcare sector showed promise only in seed-stage investments
- Absence of late-stage follow-on deals led to a significant decline in financial access investments
- Technology for Development showed promise, especially in the Small and medium enterprises (SME) space
Read the full article about impact investment trends by Shriya Nene, Swasti Saraogi and Ramraj Pai at India Development Review.