Brief History of India’s Investment Revival (part 3)
I attended a recent Investment in China and India Summit hosted by Financial Research Associates I will use this forum to share some of the slide/insights that were given at this summit for the benefit of those hoping/thinking/planning on investing in an Asian country – China, India or Japan.
I received a brief history of India’s Investment revival. I will share it here in three parts.
Return of Silicon Valley V Cs
Catalyzed by the Battery Ventures led late 2004 investment in Bangalore-based telecom equipment firm, Tejas Networks, 2005 saw several Silicon Valley VC firms – including top names like Sequoia Capital and Norwest Venture Partners – make their first direct investments in India. Now, other leading Silicon Valley VCs active including KPCB, New Enterprise Associates, BlueRun Ventures and Gabriel Ventures have become active in India.
Most “Sand Hill Road VCs”, known best for their start-up investments at home, are at least initially seeking out growth-stage companies for their Indian investments. Sequoia chose a telecom software firm, KPCB an online jobs service and Norwest a software product development services firm for their first investments in India.
Two other firms – Bessemer Venture Partners and Draper Fisher Jurvetson – displayed contrasting strategies for India. While BVP is choosing to invest in late-stage and even PIPE deals in industries like manufacturing, hotels and financial services, DFJ is raising a $200 million fund for early-stage technology investing in India.
Regardless of their differing strategies, one thing is clear: Sand Hill Road VCs are back in India. And this time it’s for the long-term. The May 2006 merger of one of the most active India-based VC firms – WestBridge Capital – with Sequoia, has only substantiated this.
Summary
The robust growth of the Indian economy and the rising opportunities for exits is attracting more and more PE firms into the country – the latest being KKR, which committed $900 million to buyout Flextronics Software. The return of Silicon Valley VCs plus half-a-dozen domestic seed and early-stage funds being raised augur well for technology start-ups in India. At the other end of the spectrum, the large international PE firms – including buyout specialists like KKR, Blackstone, TPG and Carlyle – are actively scouting for mega deals. And finding them.
For more information, email arun@ventureintelligence.in
And then, India was ready to take its place on the global economic theatre.
For more information, email arun@ventureintelligence.in
I remember when China intruduced its product to the world. People switched to China because of the quality and reasonable prices. China’s economy was booming until now that China lost to India. China raised its prices, investors looked for cheaper. India came to the picture. I wonder when India fill its thirst, who is next.
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