Venture Capital firms invest $77-M in India during Q3 ‘09

Chennai, India: Venture Capital firms invested $77 million over 17 deals in India during the three months ending September 2009, according to a study by Venture Intelligence in partnership with the Global-India Venture Capital Association. The amount invested during the period was significantly lower compared to the same quarter in 2008 (which had witnessed $298 million being invested across 55 deals), but higher compared to the immediate previous quarter ($64 million across 17 deals).

“There return of confidence in emerging markets in general and India in particular is now getting reflected in the Quarter-on-Quarter numbers,” remarked Sudhir Sethi, Director of GIVCA and Founder, Chairman & Managing Director of IDG Ventures India. “Going forward, we expect the investing momentum to pick up even further,” he added.

The latest numbers take the total VC investments in the first nine months of 2009 to $201 million (across 46 deals) as against the $709 million (across 124 deals) during the corresponding period in 2008.

Among the largest investments reported investment during Q3 2009 was the Lightspeed Venture Partners-led investment of Rs. 50 crores (about $10 million) in Mumbai-based Itz Cash Card, India’s largest multi-purpose pre-paid card company. Existing investors Matrix Partners India and Intel Capital participated.

Information Technology and IT-Enabled Services (IT & ITES) companies accounted for 41% of the investments during Q3 ’09 (42% by value), the GIVCA/Venture Intelligence research shows.

Helped by the continued interest in microfinance firms, the BFSI industry attracted $25 million across five companies.

VC Investments by Industry – By Volume

The Global India Venture Capital Association (formerly, US-IVCA) is a non-profit organization established in California in June 2002. It is an association of US-based venture capitalists interested in US-India cross-border investments. Its membership consists of venture capital firms, service providers, corporate investors and business professionals.

Venture Intelligence, a division of Chennai, India-based TSJ Media Pvt. Ltd., is the leading provider of data and analysis on Private Equity/Venture Capital and M&A deals in India.