India still far behind China
Venture Capital (VC) funds continued to show confidence in the economy and companies in India as VC investment doubled during the second quarter of 2008. The latest Quarterly India Venture Capital Report by Dow Jones VentureSource puts VC investments in Indian economy during the second quarter at $238 mn across 17 deals compared with $108 mn across 12 deals during the same period last year. The VC investments rose 120% y-o-y.
Category wise breakup of the investments showed that advertising start-ups got the biggest share of VC funds in the second quarter at $89 mn, and it accounted for nearly 37% of the total investments in the period. Second in terms of investment was the IT industry, which recorded three deals worth $33 mn during the second quarter, it was however a 55% decline from the $73 mn invested during the same period last year.
In terms of development stage, companies with active revenue streams attracted the most capital in the second quarter of 2008, as nearly $151 mn went to 10 deals for companies that were shipping products and another $4 mn went toward a deal for a profitable company. Just six deals, worth $83 mn, were for companies presently developing products. Another important aspect of the report is that the confidence shown by these VC funds in re-investing, there were as many as seven second-round investments out of the total deals. Among the companies invested, Laqshya Media, a Mumbai-based provider of out-of-home media advertising services attracted the largest VC investment of $70 mn during the quarter.
The VC investment in India looks paltry if compared with China, where the second quarter of 2008 saw venture investment in Mainland China surge to its highest level in five years at $1.37 bn into 71 deals, more than double the $662 mn invested in 69 deals during the same period last year. However one deal, an investment of $430 mn in Beijing-based Oak Pacific Interactive, which provides an Internet platform for Web 2.0 communities accounted for 31% of the country's investment total.
Venture Capital (VC) funds continued to show confidence in the economy and companies in India as VC investment doubled during the second quarter of 2008. The latest Quarterly India Venture Capital Report by Dow Jones VentureSource puts VC investments in Indian economy during the second quarter at $238 mn across 17 deals compared with $108 mn across 12 deals during the same period last year. The VC investments rose 120% y-o-y.
Category wise breakup of the investments showed that advertising start-ups got the biggest share of VC funds in the second quarter at $89 mn, and it accounted for nearly 37% of the total investments in the period. Second in terms of investment was the IT industry, which recorded three deals worth $33 mn during the second quarter, it was however a 55% decline from the $73 mn invested during the same period last year.
In terms of development stage, companies with active revenue streams attracted the most capital in the second quarter of 2008, as nearly $151 mn went to 10 deals for companies that were shipping products and another $4 mn went toward a deal for a profitable company. Just six deals, worth $83 mn, were for companies presently developing products. Another important aspect of the report is that the confidence shown by these VC funds in re-investing, there were as many as seven second-round investments out of the total deals. Among the companies invested, Laqshya Media, a Mumbai-based provider of out-of-home media advertising services attracted the largest VC investment of $70 mn during the quarter.
The VC investment in India looks paltry if compared with China, where the second quarter of 2008 saw venture investment in Mainland China surge to its highest level in five years at $1.37 bn into 71 deals, more than double the $662 mn invested in 69 deals during the same period last year. However one deal, an investment of $430 mn in Beijing-based Oak Pacific Interactive, which provides an Internet platform for Web 2.0 communities accounted for 31% of the country's investment total.
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