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| VC investments down 43% in 2009 |
| BS Reporter / Mumbai Jan 20, 2010, 00:47 IST |
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Fourth quarter most active; south India is favourite destination.
Venture capital (VC) investments in India dipped 43 per cent to $475 million (around Rs 2,166 crore) over 92 deals in 2009, said a study by Venture Intelligence in partnership with the Global-India Venture Capital Association (GIVCA).
In 2008, their total investments were $836 million across 153 deals.
VC firms, however, began to increase their pace of investments in the fourth quarter (October-December) of 2009, making 42 investments worth $265 million - significantly higher than that during the same period in 2008 (23 investments worth $102 million) as well as in the third quarter of 2009 (19 deals worth $74 million).
“During 2010, we expect significant follow-on investments in companies that raised Series A rounds in the last two-three years and rise in exit activity, as the global economic recovery gathers pace,” said Sudhir Sethi, director of GIVCA, and founder, Chairman & Managing Director of IDG Ventures India.
While the information technology (IT) and IT-enabled services (ITeS) industry retained its primacy among VC investors during 2009, its share declined to 43 per cent (from 55 per cent during 2008). Within IT & ITeS, online services companies retained their status as the most favourite, accounting for 39 per cent of the investments during 2009.
Other industries that attracted significant investor attention during the period included financial services (led by micro-finance deals), healthcare & life sciences and alternative energy.
Companies based in south India accounted for 50 per cent of all VC investments (47 per cent by value) during 2009. Their peers in western India accounted for 25 per cent of the pie (29 per cent by value). Companies based in north India accounted for 15 per cent of the investments (12 per cent by value).
Among cities, companies headquartered in Bangalore and Mumbai got the most attention from VC investors, with the former attracting 29 investments and the latter 15. The Delhi National Capital Region (including New Delhi, Gurgaon and Noida) accounted for 11 investments, followed by Hyderabad with nine.
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