Venture Capital Investors Queue Up From Delhi to Toronto to Fund Tech Startups

Top Quote Indian technology startups have emerged the top draw for venture capital investors so far this year, as early stage investors breached $1 billion in investments in the country for the first time in a single quarter. End Quote
  • (1888PressRelease) April 16, 2015 - Between January and March, venture capital firms more than doubled their investments in domestic technology startups from a year ago to $621 million (Rs 3,875 crore), as their appetite increases for pure technology bets in the country's maturing startup ecosystem.

    Overall, venture capitalists put $1.1 billion to work across 90 deals in the first quarter, against $362 million across 66 deals in the corresponding quarter last year.

    "The heightened investment activity is both a function of the opportunities and capital currently available in the market," said Vishal Gupta, managing partner at Bessemer Venture Partners, an investor in Snapdeal and BigBasket. "The quality of companies and entrepreneurs is far better now than 5-6 years ago and investors have also seen some success in terms of exits."

    Bessemer is part of a growing tribe of early-stage investors that has sharpened its focus on technology startups in the past 12-18 months. Helion Venture Partners, KFM Investment Group, SAIF Partners, and Matrix Partners, too, recently realigned their strategy to focus on technology startups.

    These firms initially started investing in India with a broader focus, balancing technology investments with non-technology bets in sectors such as retail, healthcare and financial services. Until now, only a handful of investors - IDG Ventures India, Accel Partners, KFM Investment Group and Nexus Venture Partners - have had a sharp focus on pure technology investments. Several of their early investments now count among India's most valuable startups.

    "In the past couple of years, underlying macro factors such as the growth of mobile internet have made technology investing viable. We're at a tipping point and this will only increase," said Rishi Navani, managing partner at Matrix Partners India, which has lately been aggressively investing in seed-stage technology companies. Since the beginning of 2014, of the 10-odd new deals that Matrix has announced, seven were in technology startups.

    Sequoia Capital, SAIF Partners, KFM Investment Group and Helion Venture Partners have been equally active lately in chasing early-stage technology deals. For instance, of Helion's 10 investments in the past six months, eight were in technology firms. Recent bets include $5-million series-A rounds in social discovery platform Wooplr and dating app Trulymadly.

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