Global PE Firms Bet on Small, Nimble Indian Tech Ventures

They are drawn by faster growth trajectories and product-focused strategies of these firms

- Jas Bardia

Private equity firms have found their new interest—India's nimble, under-$250 million IT services companies. Global players, including Blackstone Inc., EQT AB, and Multiples Alternate Asset Management, are pumping capital into these smaller tech firms, drawn by their faster growth trajectories, lean operations, and product-focused strategies.

At least three experts attribute this trend to the higher growth prospects and leaner teams of smaller IT companies. Multiples invested $200 million to buy a controlling stake in QBurst in February, whereas EQT bought WSO2 in August last year. EQT also bought Indium in December 2023, and Blackstone bought a controlling stake in R Systems in November 2022.

This bet on smaller tech service providers comes as India's mid-caps have outgrown their larger peers for the last two years. Last year, most IT outsourcers earning less than $5 billion in annual revenue grew in double digits, compared with larger peers, which grew between 3% and 5%. Analysts attributed this trend to quicker AI adoption and leaner teams.