Canaan Partners to expand in India

Canaan Partners, the US-based early stage venture capital firm with $2.5 billion under management, is planning to raise its eighth fund with a target corpus of $650 million. The seventh fund from which the VC is currently investing is $450 million.

The company, which styles itself as venture catalyst, has been increasing its exposure in India, and is understood to have committed close to $50 million in four companies during the past year and half including investments in BharatMatrimony.com and techtribe.com.

Canaan India head Alok Mittal confirmed that the process is on for a new fund in the whereabouts of $650 million, and added that the India team is being expanded to handle hike in deal flows. "We do not have a target of how much we will invest in India, but we are certainly looking for more opportunities," Mittal added.

The move by Canaan to raise its next round comes close on the heels of venture firms like Matrix India Partners, Sandalwood Capital and Sequoia raising early stage funds in the range of $300-500 million with significant interest in India.

According to industry research, a total of $500 million is expected to be invested in India across ninety early stage companies by VCs during 2007.

Mittal added that the existing 30-plus limited partners in the seventh fund such as U C Berkeley are expected to come in again as LPs for the next fund. Canaan is also among the early investors in Bangalore-based e4e Labs started by ex-Wiproite Dr Sridhar Mitta.