Financial Daily from THE HINDU group of publications
Tuesday, Apr 16, 2002
Financial Daily from THE HINDU group of publications Tuesday, Apr 16, 2002 |
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Info-Tech
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Venture Capital `India second largest market for VC funding' Vipin V Nair
NEW DELHI, April 15 DOT-COMS may have burst and software firms may have got hit, but a Venture Capitalist (VC) can never curb his animal spirits. Even in fiscal 2001-02, one of the toughest years for the tech sector, VCs pumped in over $ 1.1 billion into India's knowledge industry. According to estimates by Indian Venture Capital Association (IVCA), despite the global economic slowdown that wrecked the IT industry, VC investments in Indian companies during 2001-02 was only marginally down to $ 1.1 billion (Rs 5,200 crore) from $ 1.2 billion (Rs 5,470 crore) in the previous year. In fact, India was the second largest market for VC funding during the year after Japan, which saw investments to the tune of $ 1.9 billion. Compared to this, China, projected to be an emerging threat to Indian software capability, attracted only $ 39 million funding. As much as 91 ventures received funding in 2001-02 in India, says the National Association of Software and Services Companies (Nasscom) in a report, quoting the Asian Venture Capital Journal. Around 70 VC funds were operating in India last year with a total $5.6 billion assets under management. Indicating that VCs had become more cautious in funding start-ups, the share of seed-funding in the total disbursement during the year was just 15 per cent while that total amount disbursed over expansion and late funding was about 41 per cent. Also, VCs were not too keen to invest in IT services and businesses built around Internet. The non-Internet related investments increased from 28 per cent of funding in 2000 to 68 per cent in 2001. The flavour of the year was IT-enabled services, followed by wireless and biotech. Nasscom says it expects the current year to be a better one for the industry with projected disbursements in the region of $ two billion. A further capital of $ three billion is likely to be raised in 2002 for India-centric funds alone.
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