Venture capital (VC) companies’ investment dropped 74 per cent during the third quarter of the calendar year ended September as against the corresponding period last year.
A study by Venture Intelligence said VC companies invested $77 million in 17 deals in India as against $298 million in 55 deals during the same quarter in 2008. The momentum, however, is picking up; investment is higher when compared to the April-June quarter, when VCs invested $64 million across 17 deals.
“There is return of confidence in emerging markets in general and India in particular. This is now getting reflected in the quarter-on-quarter numbers,” said IDG Ventures’ Chairman and Managing Director Sudhir Sethi. The latest numbers take the total VC investment in the first nine months of 2009 to $201 million (across 46 deals) as against the $709 million (across 124 deals) during the corresponding period in 2008.
Among the largest investments in the third quarter was Lightspeed Venture Partners-led investment of Rs 50 crore (about $10 million) in Mumbai-based Itz Cash Card, India’s largest multi-purpose pre-paid card company, in which both existing investors, Matrix Partners India and Intel Capital, participated.
Information Technology and IT-enabled services’ companies attracted 41 per cent of all VC investment during June-September. The BFSI (banking, financial services and insurance) segment attracted $25 million across five companies, mainly due to the continued interest of investors in micro-finance firms.
