Canaan Partners to clinch 3 deals

Having made a total investment of $2.5 million in India so far through its investment in BharatMatrimony.com, Canaan Partners has shortlisted three more deals, which are most likely to get funding by the end of the year.

The company is also exploring options to bring an Indian adaptation of the US-based photograph printing and publishing portal, Shutterfly.

Since Canaan Partners is an early stage venture investor, it is looking at investing $2-5 million in the first phase and around $15 million in the next stage.

The companies identified are all technology based, a trend the investor would be following even as it looks at start-ups in the services and telecom space.

The company, which came to India by establishing an office at Gurgaon in 2006, is consolidating its presence in the Indian market by planning to set up two more offices this year. The Mumbai office is set to be opened in the next couple of months, followed by the Bangalore office.

"Canaan was an early-stage investor in successful US-based Internet companies such as DoubleClick, CommerceOne, Match.com and Blue Frog Mobile. We believe similar opportunities exist in India. Considering the retail and telecom boom in India, we will surely see a lot of venture capitalists setting up shop in the country," said Alok Mittal, managing director of Canaan Partners, which has a cumulative capital investment capacity of $450 million.

In 2000, the venture capital (VC) firm had invested in Aztec Software, a software development firm, and in e4e, a diversified business-outsourcing firm.

Having identified the potential of the nascent VC market in India, the company decided to take the early mover advantage, which, Mittal says is set to continue at least for the next six to seven years.

Interestingly, Canaan Partners' Israel office near Tel Aviv, which was opened 18 months ago, is among the fastest growth centres for the firm.

"In Israel, we have invested in very innovative technologies, especially in the defence sector and are looking at many exciting new ones," said Mittal.

He added that Israel was emerging as one of the most attractive countries for VCs with almost 20 seed and venture deals everyday, compared with two or three in India, which lags far behind the US, where close to 70 deals take place a day.