Tech VC funds queue up to put money in India
September 26, 2006
Tech VC funds queue up to put money in India. Check it out:(Indian Express Via Thomson Dialog NewsEdge) Venture capital (VC) funds are lining up to invest money in Indian technology sector as never before. A whopping $5-6 billion is waiting to get invested in the tech and services sectors in the next 6-9 months, industry sources say. VC investment, as per the Asian Venture Capital Journal, during the first half of 2006 was a record $3.6 billion in India, showing a staggering 400 per cent growth over the same period last year. Tech funds accounted for a lion's share of this money. Though this is less than the $5 billion received by China, India has signed more deals. Says Rishi Navani, Founding Managing Director, Matrix Partners India: "I think India is attractive, there is strong economic growth and as a result in various industries the quality of entrepreneurs has also improved significantly''. Moreover, the Indian tech story is continuing with companies putting up a good performance over the years. This is just the beginning. More VC funds are waiting in the wings. Industry sources say that over 44 US-based funds want to invest in start-ups and early-stage companies in the country. In late August, the $1.4 billion fund IDG Ventures, a pioneer in funding start-ups, announced a $150-million IDG Ventures India Fund. This fund will invest between $0.5 million and $5 million in early-stage tech firms and $10 million in high-growth firms. Says Sudhir Sethi, the Managing General Partner of IDG Ventures India, "We want to invest in high potential, futuristic firms which want to go global and not limit its operations to India. Our prime focus will be technology and tech-enabled ventures. Though the tech venture scenario is very competitive in the country, very few players are operating in this space who invest in start-ups and early stages of development''. Sequoia Capital India, run by California-based Sequoia has closed a $400-million fund to invest in later-stage and growth-stage businesses on September 15. Formerly called WestBridge Capital Partners, the firm had one of the few India-focused and India-managed venture funds for early- and mid-stage firms. Matrix Partners India, co-founded by Avnish Bajaj and Rishi Navani along with Matrix Partners US, has closed its first investment of a Rs 32 crore ($7 million) in Seventymm, India's first online movie rental firm. Matrix Partners India invests over $10 million multiple rounds with an initial investment ranging from $ 500,000 to $10 million in various tech and other services sectors. In August, State Bank of India had raised $100 million along with Softbank of Japan to invest in Indian firms at all stages of their life cycles. Draper Fisher Jurvetson's $250-million India fund and New Enterprise Associates's fund have already started their operations. But why the VC funding has gone up drastically in 2006, especially in the tech sector? "US is over funded, so VCs are looking for other avenues. India as a market is now becoming sizeable in certain sectors. Over funding is a concern going ahead though in India too,'' says Navani. "Over the next five years we expect to invest in 20-25 firms in India and the Indo-US corridor. Given IDG Venture's global network, one of the key value-additions to our investee firms in India is to help them expand into China," Sethi adds.
Copyright 2006 The Indian Express Online Media Ltd.. Source: Financial Times Information Limited.
Related Tags: matrix partners, partners india, india, India, million, invest
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