Deals Plunge By 60% To $1.8 Billion In February

The deepening funding winter that the startups face and the near dry-up of IPOs singed the deal street as the total value of deals plunged by 60% to $1.8 billion in February, according to an analysis.

According to Grant Thornton, the industry saw just 89 deals worth $1.8 billion in February, which is 60% lower than the year-ago period in value terms and down by 54% year-on-year in volume as investors continued to tread cautiously amid macroeconomic uncertainties.

This is the second-lowest deal volume and the lowest value since 2014.

Of the total deals, mergers and acquisitions saw a significant downtrend both in terms of volume, which fell 48% to 24 deals, and by 47% in value, clocking in at $755 million compared to February 2022.

The IPO segment was the worst, with just one issue raising $8 million, compared to three issues raising $1 billion a year ago.

While M&As were dominated by cross-border deals, particularly outbound transactions on the back of one big-ticket transaction of $578 million, volume continued to be dominated by domestic consolidations, accounting for 67% of transactions.

The pharma, healthcare, and biotech, and IT and ITeS sectors led the deal activities with 17% and 13% of the volume, respectively, followed by the automotive sector thanks to Autosystemtechnik's acquisition by Motherson International for $578 million.

This transaction alone was responsible for 77% of total M&A value, making it the fifth-largest deal in this sector in the past 12 years.

Private equity investments continued to fall both in terms of value and volume, recording only 65 deals worth $1 billion, making the reporting month the lowest monthly deal volume and value since August 2020.