IDG Ventures India is likely to setup its second India focused fund in late 2010 with a fund size of $250 – 300 million. 3G mobile services, gaming and ecommerce are the main areas they will be looking at for the fund.
Of the first India fund, $60 million of the $150 million has been invested, with the rest likely to be invested in the next 18 months.
via release
VCCircle reports that Ideacts Innovations, which makes advertising products targeted towards cybercafes, has raised series B funding of about $5-9 million from Sequoia and Silicon Valley Bank. They have partnered with about 3700 cybercafes and number of terminals increased from 2000 to 21,000 since the last funding round.
They claim that revenues have increased 200% month over month since launch and hope to break even in the next 4-5 months.
Wall Street Journal has a good story on the current Indian Venture Capital scene. Venture funding has shifted to later stage deals, which saw a 35% jump. 75% of the deals involved companies that were fully operational or profitable. Seed stage and first round funding fell 19%.
Funding also moved from the predominant IT sector to business & financial services.
As Ashish said, VC’s are trying to optimize their returns even more so in this tough market.
This is not so good news for Indian startups looking for early stage funding. The already small seed / early stage funding market seems to be getting even smaller.
“Lack on funding” is an often quoted reason when it comes to discussing about hurdles related to entrepreneurship in India.
Other related quotes are “Indian VC’s dont invest unless there’s a proven team or the idea has been successful in the West”.
I wanted to get a first hand VC perspective about this and so approached Ashish Gupta from Helion Venture Partners for his feedback about such statements.
His response is below:
If one looks at the companies funded in india, many of them do not fit either category. It will be good to look at the data published by venture intelligence on amount invested in ventures in india – I suspect it will be in 100s of millions per annum – still small from a global perpective but large compared to the number of funds on the ground.
Most investors are NOT trying to emulate US style companies because they are aware of the fact that india is a different kettle of fish. Proven teams is also a tricky concept – “proven in what” is the question. Just because someone has been an exec does not mean they make a good exec – and there are not many “repeat proven entrepreneurs” in india who are looking for financing.
I think that the situation is much more complex. In general worldwide very few companies get financed even after they are conceived. And this will get even fewer. It is already the case in India that fewer startups get financed than in the bay area. for a few different reasons – the main of which is that there is less money to invest and hence everyone tries to optimize the investment as much as they can. Much like an individual investor determining what stock to purchase and tries to find the most likely one to appreciate.
I dont have a first hand experience at attempting to raise funding in India — but if you do, let me know if your experience. However, based on some of the startups that have raised funding, I tend to agree with Ashish — they dont emulate western startups and neither do the founders have past entrepreneurial success.
HealthCareMagic, a health and wellness portal, which I reviewed earlier, has raised series A funding of $2.5 million from Accel India. The startup has around 50 employees, of which 34 are doctors.
The funding will be used to improve infrastructure, sales & marketing and call center.
That is great news !! Its great to see startups execute so well and move to the next set of challenges ! VC funding is definitely a great validation of their idea and execution.
via VCCircle
Norwest Venture Partners has invested $4.2 million or about Rs 20 crores in Bangalore based Appnomic Systems. Appnomic Systems provides infrastructure management services and will use the funding to expand to the US market and its product offerings.
This is NVP’s 3rd investment in the services sector in India.
via release
Intel Capital has invested $23 million across three Indian companies:
IndiaMart: a B2B marketplace
One97: a mobile VAS company
Global Talent Track: a vocational educational institute
Last year, Intel Capital invested about $50 million in 9 companies in India. The investment comes from the $250 million Intel Capital India Technology Fund, which has so far invested 40% of its funds.
via release
The Chennai Fund has invested in SchoolMATE – a BITS Pilani incubated startup.
SchoolMATE [School Mobile Assisted TEacher] is a CRM + ERP for Educational Institutions. They help schools in continuously updating parents about their child’s status and his performance at school over their mobile phones through text messages (SMS) and also through e-mail and Web using a secure mechanism.
They current have live deployments in Hyderabad and Vizag and plan to expand to Chennai and Bangalore soon.
via release
Chakpak, which I reviewed earlier, has secured VC funding from Canaan Partners. The size of the funding round has not been disclosed, however, ET puts it at around $5 million. Explaining the reason behind the funding, Alok Mittal, Canaan Partners writes:
I have been impressed with Chakpak from the get go, and they’ve indeed done a superb job at executing – especially with their Orkut apps.
Good luck to these guys !!
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