Early stage funding to see improvement

There is negligible early stage funding that is happening in India at present. But in future, India will see more improvement in this regard as compared to the US, was what most of the speakers at TiE-ISB Connect 2005 stated on Thursday.

Speaking on the state of venture capital funding in India, Sarath Naru, managing director of Andhra Pradesh Industrial Development Corporation - Venture Capital Limited, said, "In the last 12 months, there have been 14 deals in India for early stage funding as compared to 72 for late stage funding. Even with regard to the value of deals, early stage funding has been worth just $24 million while late stage funding has been worth $2,201 million."

He added that in future, however, overseas venture capitalists will increasingly flock to India and there will be improvement in early stage funding.

According to Sandeep Singhal, managing director of WestBridge Capital Partners, in the Indian environment most of the successes in technology businesses have been in service companies which usually take 10-15 years to become big.

"On the other hand, innovation-related technology ventures have high risk but bring greater returns as well. Venture capitalists normally invest in such enterprises," he said. "In the last five years, however, we have seen that capital is being made available to first generation entrepreneurs also," Singhal added.

The Indian School of Business (ISB) will be setting up new centres in its campus in the near future, M Rammohan Rao, dean of ISB, said on the sidelines of the event.

"In November, we will be setting up a Centre for Manufacturing, Supply Chain Management and Logistics wherein we will be interacting with the industry people and the government officials to understand the issues that affect various industries. Besides, in the next year we will also be setting up research-oriented centres on leadership and change management and technology management besides a behavioural lab, " Rao added.